Foreign direct investment in China fell for a sixth month in April, as faltering global growth and renewed turmoil in financial markets dented company spending in Asia’s biggest economy.
Inbound investment dropped 0.7 percent from a year earlier to $8.4 billion, the Ministry of Commerce said today in Beijing. That compares with a 6.1 percent drop in March and extends the longest stretch of declines since the global financial crisis.
Today’s data underscore the risk of a deeper slowdown in China after reports last week showed April’s industrial output growth was the slowest since 2009 and new yuan loans fell to the lowest this year.
China cut banks’ reserve requirements on May 12 to spur lending and arrest the deterioration a day after UBS AG and Bank of America Corp. lowered their second-quarter and full-year growth estimates.
“Foreign investment will be generally stable in the full year despite some monthly volatility,” Lu Zhiming, a Shanghai- based researcher at Bank of Communications Co., said before the release.
While a slowdown in industrial output growth may “indirectly” affect sentiment, foreign companies won’t rush to withdraw capital they’ve invested “as long as they continue to make a profit more easily in China than in developed nations and the political situation stays stable,” he said.
Inbound investment dropped 0.7 percent from a year earlier to $8.4 billion, the Ministry of Commerce said today in Beijing. That compares with a 6.1 percent drop in March and extends the longest stretch of declines since the global financial crisis.
Today’s data underscore the risk of a deeper slowdown in China after reports last week showed April’s industrial output growth was the slowest since 2009 and new yuan loans fell to the lowest this year.
China cut banks’ reserve requirements on May 12 to spur lending and arrest the deterioration a day after UBS AG and Bank of America Corp. lowered their second-quarter and full-year growth estimates.
“Foreign investment will be generally stable in the full year despite some monthly volatility,” Lu Zhiming, a Shanghai- based researcher at Bank of Communications Co., said before the release.
While a slowdown in industrial output growth may “indirectly” affect sentiment, foreign companies won’t rush to withdraw capital they’ve invested “as long as they continue to make a profit more easily in China than in developed nations and the political situation stays stable,” he said.
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