Sept 20, 2012
Economic Observer Online
By Zhang Bin (張斌) and Li Chunping (李春平)
Translated by Zhu Na
Original article: [Chinese] and [Chinese]

Foreign investment in China has declined just as China's investment abroad skyrocketed, according to data released at a regular press conference held by China's Ministry of Commerce yesterday.

In the first eight months of the year, 15,777 foreign-funded enterprises in sectors other than the finance industry were newly established in China, this represents a decrease of 12.38 percent compared to the same period last year.

In the first eight months of the year, investment in China from 27 EU countries fell 4.1 percent year-on-year; American investment in China fell 2.85 percent and investment from ten Asian countries and regions dropped 5 percent.

In terms of Chinese investment overseas, from January to August, China's total overseas direct investment (ODI) in the non-finance sector reached $48 billion, an increase of 39.4 percent compared to the same period last year, of which equity investment and other investment were $38 billion, accounting for nearly 80 percent.

In response to questions about whether Chinese enterprises had initiated a lot of merger and acquisition activities in Europe and the United States recently, Shen Danyang (沈丹陽), spokesperson for the Ministry of Commerce, said that from January to August, foreign direct investment by Chinese investors via mergers and acquisitions had totaled $13 billion, accounting for 28.7 percent of the total amount of China's foreign investment over the same period of time.

Shen noted that although merger and acquisition activity had increased, it was far from the tripling that some media had reported.

Shen also said that specific policies and measures aimed at stabilizing growth in China's foreign trade would be launched before the National Day Holiday at the start of October.

Shen said these measures will help to improve the business environment and financing conditions for Chinese enterprises engaged in foreign trade. Shen also said that the measures will help enterprises to reduce transaction costs, improve operating efficiency, and ease pressure on their operations.