Sars fails to dent foreign investment

Sars may have dented the mainland's image abroad as a travel destination, but has failed to deter confidence in China as a destination for foreign investments.

The Ministry of Commerce yesterday announced foreign direct investment (FDI) figures for January to May, and economists were surprised at how robust they were.

Utilised FDI rose to US$24 billion, a 46.8 per cent increase over the same period last year, while contract or committed FDI rose to US$39 billion, up 41.6 per cent.

'I'm surprised,' said Huang Yiping, China economist at Citigroup in Hong Kong. 'I heard that a lot of people had suspended their projects. I'm not sure if there is a time lag, but it's clear looking at this that Sars hasn't had a major impact.'

However, FDI growth momentum clearly slowed slightly in May. For the first four months of the year, it had exceeded the same period last year by 51 per cent.

The State Statistical Bureau also announced that fixed assets investments, both domestic and foreign, increased by 31.7 per cent in the first five months of the year to 1 trillion yuan (HK$942 billion).