FDI drops for six months

The FDI statistics issued by the Ministry of Commerce on May 15 show that in April the paid-in foreign investment in China accounted for 8.401 billion USD， down by 0.74% year-on-year. So far the FDI index has suffered a negative growth for 6 consecutive months. Experts say that the gloomy economies of the European countries and the U.S.， increasing costs and slower economic growth of China， and also competitions from other developing counties will exert continuing pressures on China’s FDI condition. It will be a long trend that the inflow of investment will slow down.

According to Ministry of Commerce， 7016 foreign-invested companies have been founded from January to April， down by 13.94% on a year-on-year basis; the paid-in foreign investment reaches 37.881 billion USD， down by 2.38% year-on-year. As of the end of this April， 745，000 foreign-invested companies have been approved to establish， with paid-in foreign investment totaling 1.2 trillion USD.

Meanwhile， the distribution of foreign investment in China has been undergoing subtle changes. On the one hand， manufacturers with low profit margin and higher costs have chosen to exit the Chinese market; on the other hand， more and more foreign companies have established RD or marketing centers in China to grab new opportunities in the emerging industries. Special Report of this issue will explore more on what behind the falling FDI.