China remains favourable for FDI

20 Feb

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Figure 1- ChinaGlobalTrade.com (2014)

 

As global economic growth rates appear to be stalling, China’s growth remains steady and the economy remains attractive to foreign direct investment (FDI). Since joining the World Trade Organisation in 2001, many foreign investors have chosen to invest in the most populous country in the world, despite the current economic climate (South China Morning Post, 2014).

 

A recent report by Reuters states that foreign direct investment in China was $10.76 billion in January 2014 alone, an annual increase of 16.1%. The high majority of investment is into China’s service sector with increases of 7.4% in distribution services and 9.2% increases in telecommunications (Standing, 2014).  Of this investment, most comes from Asian countries including Taiwan, Japan and Hong Kong, along with the USA remaining a large investor within the Chinese economy (ChannelNewsAsia, 2014).

 

Despite falls of investment into the Chinese manufacturing sector of 21.7% (Standing, 2014), the Chinese do not appear to be fazed as companies continue to expand abroad. In just a year, outbound foreign direct investment from China has increased by almost 50%, investing mainly in Asia, Africa and Europe.

 

Overall in 2013, the Chinese government grew an immense 7.6%, yet this still fell short of the national target at 8% (Standing, 2014).

 

Lucy Edwards

 

Channel NewsAsia. 2014. China manufacturing index hits seven-month low – Channel NewsAsia. [online] Available at: http://www.channelnewsasia.com/news/business/international/china-manufacturing-index/1005980.html [Accessed: 20 Feb 2014].

Chinaglobaltrade.com. 2014. Figure 1. [online] Available at: http://www.chinaglobaltrade.com/sites/default/files/us-china-trade-data-china-net-foreign-direct-investment-1982-2015.jpg [Accessed: 20 Feb 2014].

South China Morning Post. 2014. Investment flows into China grow at fastest pace since mid-2013. [online] Available at: http://www.scmp.com/business/economy/article/1430152/investment-flows-china-grow-fastest-pace-mid-2013 [Accessed: 20 Feb 2014].

Standing, J. 2014. China January foreign direct investment rises in sign of confidence| Reuters. [online] Available at: http://uk.reuters.com/article/2014/02/18/us-china-economy-fdi-idUKBREA1H02W20140218 [Accessed: 20 Feb 2014].

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