Foreign investment in China stable in October, but US investment weak due to trade war

Foreign direct investment (FDI) in China remained stable overall in October, despite slowing economic growth and weak inflows from the United States amid the trade war.

FDI, a sign of international confidence in the world’s second-biggest economy, rose to US$9.7 billion in October, up 7.3 per cent from a year earlier, the Ministry of Commerce said on Thursday.

In the first 10 months of the year, total FDI rose to US$107.6 billion, with the growth rate accelerating slightly to 6.5 per cent from the same period last year and from 6.4 per cent in the January-September period.

Investment from the US increased 4.1 per cent in the first 10 months, well below investment increases of 36 per cent for South Korea, 24 per cent for Japan and 176 per cent for Britain, the ministry said.

Outbound investment from China to the rest of the world grew 3.8 per cent year on year to US$89.6 billion in the first 10 months. About 36 per cent of Chinese overseas investment was in leasing and commercial services, 17 per cent in manufacturing and 9.4 per cent in the mining sector. There was no new investment in foreign property, sport and entertainment, the ministry said, given the government crackdown on investment in those sectors.

In yuan terms, FDI rose 7.2 per cent year on year to 64.5 billion yuan (US$9.27 billion) in October, slower than the 8 per cent rise the previous month. It was also up 3.3 per cent year on year to 701.2 billion yuan in the first 10 months of the year.