Foreign Investment into China Slumps by 16.95%
19 August 2014 14:10 WIB
TEMPO.CO, Jakarta - Foreign Direct Investments (FDI) in China fell by 16.95 percent to US$7.81 billion, or Rp91.4 trillion, throughout July 2014. According to China's Ministry of Trade, the drop brought FDI levels to its lowest point in six years.
The investment data released by Chinese authorities excludes investments in the finance sector. In the past seven months, foreign investments went down by 0.35 percent to US$71.14 billion. However, the Ministry has denied that the downward trend is caused by sanctions imposed to several foreign companies which were found guilty of monopolistic practices in China.
Chinese authorities have been investigating several foreign companies based in China that is suspected of engaging in anti-trust practices, which includes several companies in the automotive and pharmaceutical sectors, and producers of infant formula.
A spokesman for the Ministry of Trade, Shen Danyang, said that the decline in FDI is not related to the anti-trust inquiries. "Volatility in foreign investment is commonplace, especially amidst government efforts to re-balance the economy," said Shen, as reported by AFP.
When asked about the anti-trust practices, Shen said that all market players, including foreign companies, need to respect the law. "If we find that these companies are in violation of the law, we will impose heavy penalties," said Shen.
According to information released by the Chinese Ministry of Trade, for the first month of 2014, Japanese investments declined by 45.4 percent to US$2,83 billion. The same goes for investments from European Union (EU) countries, which went down by 17.5 percent to US$3.83 billion. Investments from the United States declined by 17.4 percent to US$1.81 billion.
That said, South Korean investments in China went up by 34.6 percent to US$2.92 billion, and British investments rose by 61.2 percent to US$730 million. Previously, relations between China and the UK became frosty after GlaxoSmithKline (GSK) - a British pharmaceutical giant - were accused of bribing Chinese authorities in March. Chinese police had accused GSK's Vice President Mark Reilly of ordering his staff to give millions of dollars in bribes in an effort to boost sales in the country.
CHANNEL NEWS ASIA | AFP | SETIAWAN ADIWIJAYA