FDI declines 6.1% in March

Foreign direct investment into China fell 6.1% in March, the fifth consecutive month of decline, The Wall Street Journal reported. While down in year-on-year terms, FDI in March increased to US$11.76 billion from February’s US$7.7 billion. Figures for the overall first quarter were down 2.8% on the same period last year. “Investments from the European Union were down a lot in the first quarter, falling 31.3% and that was related to the debt crisis,” said Shen Danyang, a Commerce Ministry spokesman. Shen added that continued uncertainty in the eurozone and rising labor costs in China would likely dampen FDI for the rest of the year, though China’s full-year target of 10% trade growth remains on track. Competition from other emerging countries, tightening measures in China’s property market and US incentives to keep business at home are also factors in declining FDI, Shen said. The Shanghai Composite Index fell 0.9% on the news.