Guangdong FDI falls on labor costs

Rising labor costs and competition from other regions dampened foreign-funded enterprise investment in Guangdong province last year, the South China Morning Post reported. The Guangdong Administration of Industry and Commerce said registrations of foreign-funded enterprises amounted to US$21.1 billion in investment in 2005, 3.3% down on 2004 investment. The fall reversed a recent trend which saw investment peak at a record high of US$21.8 billion in 2004, up 24.5% from the US$17.5 billion invested in 2003. The larger manufacturing sector attracted most foreign investment in 2005, but was down 17.5% from the year before. Services, which attracted just over half the investment of manufacturing, attracted a 35.5% year-on-year increase in investment, while agriculture and mining were both down 12%.