Foreign direct investment falls sharply in December

China’s foreign direct investment experienced its biggest slowdown since August 2009, falling 12.73% year-on-year in December, state media reported. It was the second consecutive monthly decrease, following November’s fall of 9.76%. Analysts say the lower figure is due to economic turmoil in the US and Europe, which made companies and investors more conservative in their foreign expansions. While investment from the US increased by 26.1% to US$3 billion in 2011, capital from the EU fell by 3.65% to US$6.3 billion. Other factors, such as a stronger currency and rising labor costs, may have also contributed to the slowdown. China’s outbound investment for the whole of 2011 increased 1.8% to US$60 billion, down sharply from 36.3% in 2010. However, investment to the troubled EU region rose by 94.1% and to resource-rich Africa by 58.9% during that period.