Foreign Direct Investment in China up by Almost 20%

21 July 2011

Foreign direct investment into China has increased by 18.4% during the first six months of this year compared to the same period last year, and is worth over $60 billion. According to economists this is due to the continuing strength of the economy and the currency. However inflation is now at a three-year high and Beijing is struggling to control this situation.

 

In total foreign companies invested $60.89 billion in factories and various other projects in China from January to June, up from $51.4 billion in 2010. Investment during June was worth $12.86 billion which is a 2.83% increase year-on-year. According to analysts the strong currency has been attracting growing numbers of foreign investors who are seeking a better return on their money, especially while the US dollar and euro remain depressed.

 

It's not just China which is benefiting from foreign direct investment, as 10 Asian countries including Japan, Malaysia, Singapore and Hong Kong have also shown an increase. Investment into these economies has increased 23.9% year-on-year to $52.5 billion.

 

During the same period investment from the US decreased by 22.3% to $1.7 billion, and investment from the EU increased by just 1.2% to $3.5 billion. Apparently these figures are quite normal as overseas investments by both the EU and the US have fallen.

 

China remains confident that it will continue to appeal to foreign investors, even as Beijing begins a new round of tightening measures in order to contain inflation which is currently running at 6.4%. Interest rates in China have been raised five times since October, and the government has imposed stricter controls on the amount of money which banks can lend.

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