FDI dries up in China

The fulcrum to lever the global economy has apparently lost its attraction as a foreign direct investment (FDI) destination this year.

Reuters reported that for 1H,2009,China drew US$43 billion (RM150.5 billion) in FDI, 17.9 per cent less than in the same period in 2008. This was reported by the Commerce Ministry today.

That compared with a 20.4 per cent fall in the first five months.

In June alone, China attracted US$8.96 billion in FDI, down 6.8 per cent from a year earlier.

That marked the ninth straight month that FDI has fallen from year-earlier levels but the pace of decline was slower than in May, when inflows were down 17.8 per cent.

China attracted a record US$92.4 billion in non-financial FDI in 2008, an increase of 23.6 per cent from 2007.

Inflows surged in the years after the country joined the World Trade Organisation in 2001 but have weakened in recent months as the global economic slowdown has hit investment flows.

China's hope is that the decline will be smaller in the ensuing months