China's August FDI growth slows

China attracted 8.38 billion U.S. dollars in Foreign Direct Investment (FDI) in August, up 0.62 percent year on year, data from the Ministry of Commerce (MOC) showed Tuesday.

The increase was down sharply from a 24.13 percent jump in July and 20.12 percent growth in June, but higher than May's growth rate of 0.29 percent.

In the first eight months, the country's FDI inflow totaled 79.77 billion U.S. dollars, up 6.37 percent from the same period last year, the ministry said at a press conference.

The data does not cover incoming investments in banking, securities and insurance sectors.

MOC spokesman Shen Danyang attributed the subdued growth rate to a higher comparative base in August 2012, when the monthly FDI inflow rose considerably from July 2012.

"China has seen FDI year-on-year growth for seven straight months since February, which demonstrated the competitiveness of the Chinese economy and foreign investors' recognition of the business environment in China," Shen said.

The FDI growth will remain relatively stable in the next few months and this year's total FDI inflows can be expected to exceed the 2012 level, Shen said, adding that China emphasizes more the quality and structure of foreign investment than the growth figures.

From January to August, China approved the establishment of 14,480 foreign-invested enterprises, down 8.22 percent from a year earlier.

The service sector saw a steady increase of FDI inflows in the first eight months, up 13.5 percent year on year and accounting for 49.84 percent of the total FDI inflows during the period.

Foreign investment in the manufacturing sector fell 3.27 percent, taking a 40.9-percent share of the FDI inflows, Shen said.

Direct investment from the United States and the European Union jumped 18.04 percent and 4.27 percent, respectively, to 2.50 billion U.S. dollars and 5.44 billion U.S. dollars in January-August.

Meanwhile, Chinese investment in overseas non-financial sectors rose 18.5 percent year on year to 56.5 billion U.S. dollars in the first eight months, the ministry also said.

The MOC data follows the recent release of a series of economic barometers that pointed to a firming Chinese economy.

China's electricity consumption, a common indicator of economic activity, rose 13.7 percent year on year in August, marking its fastest growth since March 2012, the National Energy Administration said on Saturday.

Customs data also indicated that exports and imports have further recovered due to a stable yuan and increasing external demand. Trade surplus widened by 8.4 percent year on year to 28.52 billion U.S. dollars in August, the highest since January this year.

"The macroeconomic situation in the past few months showed that the country's economy is developing in a positive trend," Shen said, adding that the trend will not be affected by short-term difficulties in some countries or the so-called financial crisis in some emerging markets.