Foreign Investment in China Up 19% in September

October 15, 2009

Foreign Investment in China Up 19% in September

By THE ASSOCIATED PRESS
Filed at 12:24 a.m. ET

SHANGHAI (AP) -- Foreign direct investment in China rose by nearly a fifth in September, suggesting the country's economic recovery is attracting investment after a lull earlier in the year.

FDI was worth $7.9 billion for the month, up 19 percent from a year earlier, the Commerce Ministry said Thursday.

But actual foreign direct investment for the first nine months of the year totaled $63.8 billion, a 14 percent decline from the same period of 2008.

China is a top investment destination but double-digit growth rates plunged in late 2007 as foreign companies were hit by the global downturn and cut spending. Many are continuing to invest in China to take advantage of its stronger economic growth compared with other countries.

There was a nearly 11 percent increase in the number of newly approved foreign invested companies in September.

The September rise in foreign direct investment compared with a 7 percent year-on-year increase in August, and declines of 35.7 percent in July and 6.8 percent in June.

"The two months' rebound shows the confidence of foreign investors in the Chinese economy. With the strong rebound in the domestic economy, I believe more foreign investors will participate in China's economic development," ministry spokesman Yao Jian told reporters in Beijing.

The foreign direct investment figure does not include stocks and other financial assets, which also appear to be attracting strong investment inflows: China's foreign reserves, already the world's largest, hit a record high $2.273 trillion by the end of September, the central bank reported Wednesday.

China's economic growth rose to 7.9 percent over a year earlier in the quarter ending June 30, up from 6.1 percent the previous quarter, and analysts say the recovery is gathering strength. Retail spending and industrial investment are rising.

On the Net:

Chinese Commerce Ministry: http://www.mofcom.gov.cn

Associated Press researcher Bonnie Cao contributed to this report from Beijing.