China's FDI surges in June, steady growth expected

China's foreign direct investment (FDI) marked a surprise increase in June, soaring 20.12 percent from a year earlier to 14.39 billion U.S. dollars, the Ministry of Commerce (MOC) announced Wednesday. The surprising FDI data for June did not include influxes of overseas funds in the banking, securities and insurance sectors but still marked a significant surge from the 0.29-percent year-on-year increase seen in May, according to the MOC. The figure marked the fifth consecutive monthly increase since February, when China reported an FDI recovery after seeing monthly declines since June 2012. In the first half of 2013, China's FDI totaled 61.98 billion U.S. dollars, up 4.9 percent year on year. "The FDI increase proved the competitiveness of the Chinese economy and international investors' recognition of the investment environment in China," MOC spokesman Shen Danyang said at a press conference. "But we can not conclude that China's FDI has rebounded by simply looking at just a single month's data. We expect the FDI in the second half to grow steadily," he added. During the first six months, China approved the establishment of 10,630 foreign-invested enterprises, down 9.18 percent from a year earlier. Nearly half of the new FDI in the January-June period went to the service sector, which saw a year-on-year increase of 12.43 percent. While the service sector took 49 percent of the total FDI inflows, the manufacturing sector attracted 26.44 billion U.S. dollars of foreign investment, down 2.14 percent, and held a 42-percent share of FDI inflows, Shen said. Direct investment from the European Union and the United States jumped 14.68 percent and 12.29 percent, respectively, to 4.04 billion U.S. dollars and 1.83 billion U.S. dollars in the first half. In a regional breakdown, China's western regions saw strong growth in foreign investment, with an increase of 32.54 percent, compared with a 15.75-percent gain for central regions and a 1.69-percent gain for the east. Meanwhile, Chinese investment in overseas non-financial sectors rose 29 percent year on year to 45.6 billion U.S. dollars in the first six months. The country's outbound investment maintained fast growth and covered a wide range of industries, while the investment structure has become more optimized, Shen said. MOC data show that nearly 90 percent of Chinese outbound investment went to the commercial service, retail and wholesale, construction, manufacturing and mining sectors. Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, an MOC think tank, forecast that China's outbound investment will reach around 550 billion U.S. dollars in the 2011-2015 period.