China November FDI Continues To Recover

(chinatrucks.com, Dec.17, 2009)Actual foreign direct investment in China continued to improve in November compared with a year earlier because of the global economic recovery and a low comparison base, though the value of FDI remained stable compared with the previous month.

The Ministry of Commerce signaled Wednesday it was cautiously optimistic about the outlook for foreign investment and exports in the near future, but it doesn't expect the export sector to re-emerge as a major driver of economic growth any time soon.

China attracted US$7.02 billion worth of actual foreign direct investment in November, up 31.97% from a year earlier, it said.

November was the fourth straight month of year-on-year FDI growth and followed October's 5.7% increase to US$7.1 billion. FDI had been falling on a year-on-year basis since October 2008.

"The FDI has steadily recovered, and the situation will continue in the coming several months," ministry spokesman Yao Jian said at a regular news conference.

The monthly FDI is likely to stay at US$7 billion to US$8 billion in the coming months, he said. That would be consistent with the FDI level in the past four months.

Actual FDI in the January-November period totaled US$77.9 billion, down 9.86% from a year earlier, a narrower fall than the January-October period's 12.6% decline.

China's exports are likely to rise in December from a year earlier because of a low comparison base, after unexpectedly falling in November, he said.

"China's trade surplus is likely to narrow further next year," Yao said. Trade is likely to return to 2008 levels only in 2011, he added.

The country's trade surplus in the January-November period was 30% narrower than a year earlier, dragging on economic growth.

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