Jurisdiction - China
China – Reported 32% Rise In Foreign Direct Investment From Britain.

20 November, 2014


Legal News & Analysis – Asia Pacific – China – International Trade


Foreign direct investment (FDI) from Britain into China increased 32.4% year on year over the first 10 months of 2014, according to China’s commerce ministry.


Ministry figures reported by China’s state-run Xinhua News Agency said overall FDI, excluding investment in the financial sector, reached a total of USD 95.9bn over the past 10 months, down by just 1.2% from the same period in 2013.


Xinhua said “the decline is less than the 1.4% fall registered in the first nine months and the 1.8% drop posted for the first eight months”.


Among the 10 major investors in China, including the UK, FDI from South Korea increased 26.4% year on year in the first 10 months of this year, Xinhua said. However, investment from Japan plunged 42.9% over the period while FDI from the US fell by 23.8%. Overall FDI from the EU was down 16.2%.


Commerce ministry spokesman Shen Danyang told Xinhua that the falls in FDI could be attributed to “restructuring of China’s manufacturing industry that used to attract the majority of this kind of investment”.


FDI into the manufacturing sector over the first 10 months of this year fell 15.1% year on year to USD 32.5bn, Xinhua said. The service sector attracted USD 53.1bn, which Xinhua said was an increase of 6.6%. Outbound direct investment by non-financial firms rose 17.8% over the same period to USD 81.9bn.


Proposed changes to China’s Foreign Investment Guidance Catalogue will encourage more foreign companies to invest in the country, the Chinese National Development and Reform Commission (NDRC) said earlier this month.


The NDRC said that the proposed changes would reduce the number of sectors that limit foreign investment from 79 to 35, and cut the number of sectors where Chinese investors must hold a larger share from 44 to 32.


According to the World Trade Organization (WTO), FDI into China reached USD 117.6bn in 2013. The WTO said the main sectors attracting FDI were manufacturing, real estate, and wholesale and retail trade.


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