May 14, 2009

China confident about FDIs

Foreign direct investments in China fell sharply in April, but analysts in the country said they are not concerned.

China will continue to be one of the main venues for FDIs this year, China Daily reported Friday, quoting the analysts.

China Daily said the Dow Jones had reported April's FDI totaled $5.89 billion, down 22.51 percent from the same month of last year, but added the Chinese Ministry of Commerce had not confirmed the numbers.

It also quoted experts as saying they didn't think the figure would be far off the mark.

FDIs in China, impacted by the global financial crisis, have been falling for seven straight months. China Daily said the reported April decline, however, was much higher than in March's 9.5 percent on a year-to-year basis.

The experts told the newspaper investments in China will regain their momentum later this year as the global economic recovers.

We were worried about overheating earlier last year, said Lu Jinyong at the University of International Business and Economics in Beijing. But the business environment has changed quite dramatically since. Year-on-year comparisons do not make as much sense now.

Dong Xian'an with Southwest Securities expects the economy's contraction to ease in the second half of this year and it is very likely that FDI inflows will recover and start to increase at the turn of the year.

Another analyst said he expected FDIs to total about $80 billion this despite the global crisis. Last year's FDIs totaled $92.4 billion.