China says foreign direct investment up 18.1 per cent

BEIJING: Foreign direct investment in China rose 18.1 per cent in the first eight months of 2010, the government said Wednesday, as confidence in the world's second-largest economy appeared to moderate slightly.

Foreign companies pumped 65.95 billion US dollars into China in the January-August period, commerce ministry spokesman Yao Jian told reporters at a regular briefing.

That marked a slight deceleration from the 20.7 per cent growth logged from January to July and the 19.6 per cent increase seen in the first half.

However, that was probably due to a high base of comparison in August 2009, when foreign direct investment (FDI) rebounded strongly from an earlier period of weakness, said Ren Xianfang, an economist at IHS Global Insight.

For the month of August, foreign direct investment totalled 7.6 billion dollars, up 1.4 per cent over the same month in 2009, Yao said.

That compares to a jump of 29.2 per cent in July.

Ren said, however, the data could signal overseas "uncertainty" that impacts foreign investment.

"The uncertainty in external demand will suppress the impulsiveness of foreign investment to enter the Chinese market," Ren said.

The data includes investment by overseas companies in industries such as manufacturing, real estate and agriculture but excludes money put into banks and other financial institutions.