China foreign direct investment surges to two-year high

Foreign direct investment into the mainland saw its strongest surge in more than two years last month with the US$14.4 billion of capital committed leaving the world's second biggest economy firmly on track to meet the government's target of US$120 billion of inflows this year.

Data published by the Ministry of Commerce yesterday showed first-half non-financial FDI had reached a total of US$61.98 billion.

June's reported inflow was the single highest monthly total since 1997, fuelled by solid double-digit increases from investors in Japan, the European Union and the United States and confounding analysts who had expected FDI inflows to have slowed alongside the mainland's slackening economic growth in the second quarter of the year.

Ministry of Commerce spokesman Shen Danyang told a news conference in Beijing yesterday that a gentle uptick in FDI was expected to be sustained for the rest of this year.

"We believe the FDI inflows will still keep relatively stable in the second half of this year," Shen said.

The gain in FDI comes against a backdrop of a struggling mainland economy, where growth in the second quarter of the year slowed to its weakest pace in a year, up 7.5 per cent, to mark the 11th quarter of slowing annual growth in the last 13.