Foreign direct investment (FDI) in July fell 35.7% year-on-year to US$5.4 billion, the South China Morning Post reported, citing data from the Ministry of Commerce. Foreign investment in China for the first seven months of the year stood at US$48.3 billion, down 20.4% from the same period one year earlier. While FDI has declined for 10 consecutive months due to the global financial crisis, the year-on-year drop has narrowed each month since April. Analysts said that falling FDI may be more related to strained liquidity for multinational firms rather than weakness within the Chinese economy. They added that the drop in FDI would have little effect on China’s overall economic growth and was unrelated to the arrest of Rio Tinto employees in Shanghai.
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