Foreign direct investment falls 5.7% in China

Country:  China

26 January 2009

Foreign direct investment in China has fallen for a third consecutive month, down 5.7% to $5.98bn (£4.33bn) in December from a year earlier, according to China’s commerce ministry.

Average residential property prices in the country’s 70 major cities fell for the first time on record in December, and exports are declining due recessions in the USA and Europe.

Ma Yu, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said: “Multinationals will become even more cautious in expanding. A lot of the foreign investment that rushed to China over the past few years to gain from a stock and property boom is leaving.”

The number of new companies set up by U.S. investors in China fell 32% in the first 11 months of last year. For European investors, the decline was 23%.