FDI falls by nearly 8% in May

Foreign direct investment (FDI) in China fell 7.86% to US$4.5 billion last month compared to the same month in 2005, according to Ministry of Commerce figures. Although overall FDI for the first five months of the year is up 2.78% to US$23 billion, the recent slowdown was inevitably linked to closer government scrutiny of foreign acquisitions in China. The FDI announcement coincided with reports that the State Council plans to set up an interdepartmental committee to investigate large-scale foreign mergers or acquisitions of state-owned enterprises, the South China Morning Post reported. At US$6.9 billion for the first five months, Hong Kong remains the biggest investor in mainland China with the British Virgin Islands second on US$4 billion and Japan third on US$1.9 billion.