FOREIGN direct investment in China expanded steadily at the start of 2011, following more extreme growth rates toward the end of last year.
However, analysts say the country should still be on the lookout for the inflow of speculative "hot money" which can lead to destabilizing asset bubbles.
January's foreign investment grew 23.4 percent from a year earlier to US$10.03 billion, the Ministry of Commerce said yesterday. This compared with an increase of 15.6 percent in December and a surge of 38.17 percent in November.
FDI does not include investment in stocks and other financial assets.
"The growth last month turned out to be more reasonable," said Li Maoyu, an analyst at the Changjiang Securities Co.
On the alert
"But it's still a bit high considering the timing is just prior to the Spring Festival holiday - not a usual time for rapid investment expansion. The government should be on the alert for hot money."
Yao Jian, a ministry spokesman, said China will continue to welcome foreign investment, on the condition that such funds are lawful.
China announced this month that it will establish a system inspecting foreign investors seeking to acquire Chinese companies.
Yao said this is aimed at encouraging, not limiting, this "trendy" form of investment in China.
"The rule is necessary and will help nurture a healthy market for mergers and acquisitions," Yao said.
More than 70 percent of the world's US$1.12 trillion cross-border investment last year was made through mergers and acquisitions, while in China the figure was only 3 percent, said the ministry.
Foreign investment in China has kept increasing for 18 consecutive months, with funds pumped into services industry a major driver of growth. In January, the services industry in China received foreign investment worth US$4.69 billion, accounting for 46.8 percent of the total volume.
West China attracted US$510 million foreign investment, up 81.1 percent from a year earlier. Eastern areas saw a rise of 23 percent, while central areas lost 2 percent.
Meanwhile, China's outbound non-financial foreign investment grew 15.9 percent from a year earlier to US$2.73 billion, with more capital going to Oceania, Europe and Africa.
China's rapid economic expansion and a vast domestic market will keep the country an attractive destination for foreign investment, said Sun Lijian, an economics professor at Fudan University.
In 2010, China ended Japan's 42-year reign as the world's second-largest economy. Gross domestic product in China gained 10.3 percent on an annual basis last year to 39.79 trillion yuan (US$6.03 trillion). Analysts expect 8 percent growth this year.
Shanghai's foreign direct investment advanced 5.5 percent from a year earlier to US$792 million in January, city statistics officials said.
Source:Shanghai Daily
However, analysts say the country should still be on the lookout for the inflow of speculative "hot money" which can lead to destabilizing asset bubbles.
January's foreign investment grew 23.4 percent from a year earlier to US$10.03 billion, the Ministry of Commerce said yesterday. This compared with an increase of 15.6 percent in December and a surge of 38.17 percent in November.
FDI does not include investment in stocks and other financial assets.
"The growth last month turned out to be more reasonable," said Li Maoyu, an analyst at the Changjiang Securities Co.
On the alert
"But it's still a bit high considering the timing is just prior to the Spring Festival holiday - not a usual time for rapid investment expansion. The government should be on the alert for hot money."
Yao Jian, a ministry spokesman, said China will continue to welcome foreign investment, on the condition that such funds are lawful.
China announced this month that it will establish a system inspecting foreign investors seeking to acquire Chinese companies.
Yao said this is aimed at encouraging, not limiting, this "trendy" form of investment in China.
"The rule is necessary and will help nurture a healthy market for mergers and acquisitions," Yao said.
More than 70 percent of the world's US$1.12 trillion cross-border investment last year was made through mergers and acquisitions, while in China the figure was only 3 percent, said the ministry.
Foreign investment in China has kept increasing for 18 consecutive months, with funds pumped into services industry a major driver of growth. In January, the services industry in China received foreign investment worth US$4.69 billion, accounting for 46.8 percent of the total volume.
West China attracted US$510 million foreign investment, up 81.1 percent from a year earlier. Eastern areas saw a rise of 23 percent, while central areas lost 2 percent.
Meanwhile, China's outbound non-financial foreign investment grew 15.9 percent from a year earlier to US$2.73 billion, with more capital going to Oceania, Europe and Africa.
China's rapid economic expansion and a vast domestic market will keep the country an attractive destination for foreign investment, said Sun Lijian, an economics professor at Fudan University.
In 2010, China ended Japan's 42-year reign as the world's second-largest economy. Gross domestic product in China gained 10.3 percent on an annual basis last year to 39.79 trillion yuan (US$6.03 trillion). Analysts expect 8 percent growth this year.
Shanghai's foreign direct investment advanced 5.5 percent from a year earlier to US$792 million in January, city statistics officials said.
Source:Shanghai Daily
