Healthy Growth of Foreign Investment in China

According to the Ministry of Commerce, in the first half of the year China ratified 13,462 new foreign-funded companies, and actually used foreign investment of US $60.89 billion, up 8.77 percent and 18.4 percent respectively over the same period of 2010. The proportion of foreign money applied to the service sector is growing faster than that in the fields of farming, forestry, animal husbandry and fishing or manufacturing. The growth rate is higher in central and western provinces than in eastern China. Asia is the strongest source of foreign capital, establishing 10,850 businesses (up 9.83 percent) in China from January to June, and supplying US $52.53 billion (up 23.88 percent). The EU countries founded 840 new corporations (up 10.38 percent) in China in that six-month period, and invested US $3.46 billion (up 1.17 percent). In contrast the number of new American-funded companies fell by 5.09 percent in the corresponding period last year, to 727, and American capital streaming into China reported the more remarkable dip of 22.32 percent, or US $1.679 billion. The slowing or retraction of EU and U.S. investment in China is part of the bigger picture worldwide. The EU's global investment dwindled by 62 percent last year. Meanwhile, the U.S. is also holding back on overseas spending, including in the emerging markets of Brazil and India. The Ministry of Commerce also revealed that in the first half of the year China made direct investments in 2,169 companies in 117 countries and regions worldwide, and the total direct investment in non-financial sectors reached US $23.9 billion, increasing 34 percent over the corresponding period in 2010. Mainland investment in Hong Kong, the EU and Australia picked up strength, while that in the U.S., ASEAN, Russia and Japan is on the decline.