China expects 2015 FDI inflows to quicken to 4% y-o-y

[BEIJING] Growth in China's foreign direct investment (FDI) is expected to quicken to around 4 per cent in 2015 from the previous year on government efforts to improve its investment environment, the country's Commerce Ministry said.

China's FDI may hit an all-time high of US$125 billion this year barring no sharp changes in the external environment, the official Xinhua news agency quoted Vice Minister of Commerce Wang Shouwen as saying.

FDI in China rose just 1.7 per cent in 2014, the slackest pace since 2012, even if the investment value hit a record high of US$119.6 billion.

Slower growth underscored a cooling economy which is spurring more Chinese firms to plough money into assets overseas in a trend that is soon set to overtake inbound investment.

But Mr Wang conceded that China's FDI still faces challenges this year due to external headwinds. "Due to sustained weakness in the global economy, a slow economic recovery in main investors' countries and the tapering of the United States stimulus programme, China's FDI still faces tough external situation in the second half of this year," Mr Wang said.

FDI in the first six month in China rose 8 per cent to US$68.4 billion from a year earlier, Mr Wang added.

FDI is an important gauge of the health of the external economy that sustains China's vast factory sector, but is a small contributor to overall capital flows compared with exports, which were worth US$2.3 trillion in 2014.

The ministry is expected to announce monthly investment figures for June on Tuesday.

On Friday, Mr Wang had said China's FDI inflows rose 8.0 per cent in the first six months from a year earlier, but no breakdown was given for June.

REUTERS