BEIJING: Foreign direct investment into China accelerated in 2015 as cash poured into the country’s service sector, official data showed yesterday, despite slowing expansion in the world’s second-largest economy.
Foreign direct investment (FDI), which excludes the financial sector, rose 5.6% from the previous year to $126.3 billion, according to figures from the Commerce Ministry. That is more than triple 2014’s growth of 1.7%.
Investment from overseas has been a key element of China’s economic boom in recent years, but as it matures the Asian giant is increasingly becoming a source of funds as much as a destination. Figures for China’s own overseas direct investment (ODI) will be released at a later date.
Companies that have received foreign investment were responsible for nearly half of China’s foreign trade, around 14% of urban jobs and 20% of tax revenues, said a statement with the figures. The pick-up in FDI was driven by strong expansion in investment into the service sector, which has held up well despite growth momentum in the overall Chinese economy weakening as it matures.
“The quality of FDI continued to improve and its industrial structure was further optimised,” an unnamed ministry official in charge of investment said in a statement with the figures, without giving further details.
FDI into the service industry jumped 16.6% to $77.2 billion last year, sharply outpacing the 7.6% increase in 2014, the ministry’s data showed. But despite the recovery in 2015, it remains significantly below the double-digit rates of the past.
China’s economy grew at its slowest pace for 24 years in 2014 and eased further last year, as Beijing struggles to transform the country’s growth model to a slower but more sustainable one driven by domestic consumption instead of exports and public investment.
In July-September the country logged its worst economic performance since the global financial crisis, with growth of 6.9%. The government is scheduled to release gross domestic product figures on Tuesday.
