China Foreign Investment

When looking for a good investment what are the odds for China foreign investment as a sound business opportunity? Although direct foreign investment is on the rise in the industrialized countries of North America, parts of Europe specifically the North West of Europe and even Japan, but what about China Foreign Investment? According to the commerce ministry of China, they state that China foreign investment is down from last year by 18%. If we look at the statistics, China foreign investment from USA was 43 billion of the 54 billion total direct foreign investments in the first six months of the year. However the figure is down by 17.9% reported in the same time frame for 2008.

China foreign investment experienced a 20.4% fall in the first five months of the year alone. In the month of June if we look at just a one-month comparison we find that China foreign investment was able to capture 8.96 billion US. However, this amount is exactly 6.8% less than last year for the one-month period. This downward trend for China foreign investment represents a nine-month trajectory. Furthermore the actual pace of the decline was below the average of 16.8% and proved to be slower than the month of May when the inflows had plummeted by 17.8%. This is a tough period for China foreign investment. The commerce ministry spokesperson, Yao Jian reported to a news conference how China was having difficulty attracting direct foreign investment. However, China foreign investment in 2008 was up in non-financial direct foreign investment, by 23.6% over what it had attracted in 2007.

The inflows to China had gone up considerably since they joined the World Trade Organization in 2001, but because of global economic slow down China foreign investment has slowed down. Also many firms have taken their investments out of China because they feared their interests would suffer, thus adding to the decline of China foreign investment. Yian also reports that many firms especially foreign government bodies were also exploring many projects for foreign investment and so he is still optimistic that China foreign investment has an opportunity to grow and bring inflows back into the country once again.