Foreign direct investment in the mainland surged last year, passing the US$100 billion mark for the first time since 2008, amid a recovery in the global economy.
But growth slowed last month after three consecutive months of gains as December FDI grew 15.6 per cent from a year earlier to US$14.03 billion, according to data from the Ministry of Commerce, following November's 38.2 per cent increase to US$9.7 billion.
For the full year, inbound FDI rose 17.4 per cent to US$105.74 billion, reversing a 2.6 per cent decline to US$90.03 billion in the previous year. The growth rate for the full year, however, slowed from 17.7 per cent in the January-November period.
Tim Condon, chief economist with ING's Asian Research, said he believed China's accession to the World Trade Organisation triggered a productivity shock that saw FDI rise to US$100 billion from US$40 billion. 'We think the shock has passed and FDI will remain stable,' Condon said, adding he expected it to stabilise around US$100 billion annually for some years.
He said December was a seasonally strong month for FDI, averaging US$15 billion to US$20 billion in recent years. He pointed out that while last year's FDI inflows passed the US$100 billion mark, it was slightly lower than the record US$108.3 billion in 2008.
Inflows of FDI, a surging trade surplus and hot money betting on the yuan's appreciation have resulted in the fast growth in foreign exchange reserves, which may pass the US$3 trillion mark soon.
