World Economy

China Receives $68b FDI in H1 2015

China Receives $68b FDI in H1 2015China Receives $68b FDI in H1 2015

Foreign direct investment in China rose to $68.41 billion in first half of the year registering an increase of 8.3%, despite slowdown in the world’s second largest economy.

In the first half of the year, FDI, which excludes investment in the financial sector, stood at $68.41 billion up 8.3% from the same period last year, China Ministry of Commerce in Beijing said Tuesday, Outlookindia reported.

FDI in China rose 0.7% year-on-year in June to $14.58 billion slowing down sharply from 7.8% increase in May.

Investment in the country’s burgeoning service industry continued robust growth, accounting for 63.5% of total investment flows during the January-June period.

FDI in the manufacturing sector dropped 8.4% to $20.86 billion accounting for 30.5% of the total.

MOC spokesman Shen Danyang attributed the fast investment growth in services to China’s massive market opportunities, government support to the industry, as well as increased opening-up in the sector.

Investments from Macao and France saw fast growth, up 56.2% and 46.9% respectively.

In contrast, investment from Japan plunged 16.3%, and that from the US fell 37.6%.

Foreign mergers and acquisitions in China increased sharply, with their share of total FDI surging from 4.8% last year to 19.3%.

Tuesday’s data also showed China’s outbound direct investment by non-financial firms jumped 29.2% to $56 billion in the first half of the year.

The FDI data came as growth in the world’s second largest economy showed signs of bottoming out on the back of a slew of government support policies.

Growth in the second quarter came in at 7%, its weakest growth since the global financial crisis in 2009, though unchanged from the first quarter and in line with the government target of around 7%.

 Massive Funds

China’s central bank and finance ministry will inject billions of dollars into the country’s policy banks, Caixin, a respected domestic financial magazine, reported on Tuesday without specifying the source of its information.

The People’s Bank of China will inject $45 billion into the Export-Import Bank of China and the finance ministry will inject 100 billion yuan ($16 billion) into the Agricultural Development Bank of China, Caxin reported.

Both policy lenders did not respond to calls from Reuters for comment.

Beijing is stepping up reforms at its policy lenders to drive economic growth and boost Chinese companies’ global competitiveness.

Reuters reported last week that China Development Bank Corp, the country’s biggest policy lender, will receive a capital injection of $48 billion from the central bank.

After this round of capital injection totaling $109 billion, the central bank will replace the finance ministry as the biggest shareholder in CDB and EXIM, Caixin said.