Increased Amount Of Foreign Investment Capital Injected Into China Says Saikyo Sakura Assets
In January, despite slower economic growth, China reported dominant inflows of foreign investment capital as utilities and high-end manufacturing attracted interest from investors, public information showed Monday highlighted analysts from Saikyo Sakura Assets.
Chinese companies also continued to demonstrate an increasing interest in making offshore investments and trained a great deal of their attention on Europe.
In January, China received $13.92 billion in foreign direct investment, up 29.4% from the previous year, and above $13.32 billion in December, the Ministry of Commerce said on Monday.
The government said utilities accounted for two-thirds of the month’s incoming assets, while high-end manufacturing accounted for nearly all of the rest.
“In January, China demonstrated strong momentum in attracting foreign investment,” Commented Frank Hunter, Head of Corporate Derivatives at Saikyo Sakura Assets.
Last year, China’s economy rose by 7.4 per cent— outpacing other significant economies, but in nearly a quarter of a century, it was the weakest. Amid sluggish national demand and a still recovering global economy, Beijing is anticipated to reduce its growth target to about 7 per cent this year.
Foreign direct investment has slowed as the traditional manufacturing sector in China loses its competitive edge as a result of rising labour and other costs, but services, which are now a significant employer, have helped to take up the slack.
Foreign direct investment in China increased by a small 1.7 per cent last year at $119.6 billion, following a 5.3 per cent increase in 2013.
Moreover, while foreign direct investment continues to flow into the country— other forms of capital have moved out. According to previously published statistics, China had a preliminary net deficit of $91.2 billion in its capital and financial account in the fourth quarter of last year, up from a $9 billion deficit in the third quarter.
“Chinese companies foreign investments in the first month of the year reached $10.17 billion, up 40.6 per cent from a year ago” added Anthony Brown, Head of Wealth Management at Saikyo Sakura Assets.
Speaker of the Commerce Ministry, Shen Danyang, informed a media briefing Monday that the incoming investment tally of China last year was usually decisive at a moment when global investment flows were less than stable. He added that for overseas companies, China remained the central investment region.