FDI sees moderate rise

Foreign direct investment (FDI) inflows to China rose moderately in November, while those into the country's service sector jumped at a faster pace in the first 11 months of 2013, official data showed Wednesday.

The figures suggest that the structure of FDI into the country continues to improve.

Excluding financial sectors, FDI into China grew 2.35 percent in November from a year ago to $8.48 billion, data from the Ministry of Commerce (MOFCOM) showed Wednesday.

It represents an increase for 10 consecutive months and is higher than the 1.24-percent rise in October.

The figure means that FDI into China grew 5.48 percent year-on-year in the first 11 months.

"As some foreign brands are moving away from China to Southeast Asian countries for cheap labor, FDI into China still maintained growth, showing the Chinese market still remains attractive to foreign investors," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times Wednesday.

The service sector attracted $54.25 billion in FDI in the first 11 months, up 14.04 percent from a year earlier and accounting for 51.4 percent of the total FDI inflows in the period, the data showed.

In contrast, the manufacturing sector drew $41.46 billion in the same period, down 5.71 percent year-on-year and accounting for 39.3 percent of the total inflows.

"Despite the moderate growth of total FDI into China, foreign investment structure has continued to improve. Increasingly, more foreign high technology companies are optimistic about Chinese market prospects," Bai said.

"Following the Chinese government's commitment to industrial restructuring and upgrading and boosting consumption, foreign companies have no reason to overlook the Chinese market and the power of Chinese consumers," Bai said.

In the latest effort to promote foreign investment, MOFCOM announced Monday that it will simplify approval procedures for cross-border yuan direct investment to make it easier for foreign companies to use yuan to invest in the Chinese mainland.

"Shanghai Municipal Government is working to improve the 'negative list' for foreign investment in its free trade zone for 2014," MOFCOM spokesperson Shen Danyang said at a press conference for release of FDI data Wednesday.

Shanghai adopted a "negative list" approach for foreign investment in its free trade zone launched in September, which ensures foreign companies can invest without any restriction if a sector is not on the list.

"As far as we know, foreign companies are very interested in the free trade zone and keen on investing," Shen said.

According to Shen, the zone has attracted 58 overseas companies with the total registered capital having exceeded $610 million as of the end of November.

Meanwhile, China's outbound investment rose to $80.2 billion in the first 11 months, up 28.3 percent from a year earlier and quickening from the 20 percent growth in the first 10 months, Wednesday's data showed.

Investment to Russia, the US, Australia, the EU and ASEAN also surged in the first 11 months, with China's investment to Russia up 685 percent and to the US up 232.2 percent year-on-year in the same period.

Shen said the surge of investment to Russia or other regions was driven by big projects, without providing details.

Russia's oil producer Rosneft and China National Petroleum Corporation announced in October that they had signed a memorandum of understanding to jointly develop oil reserves in eastern Siberia and Russia's Far East, without specifying the value of the deal.

In September, shareholders of US pork giant Smithfield Foods Inc approved the acquisition bid from Shuanghui International Holdings Ltd at $7.1 billion, the biggest acquisition of a US company by a Chinese firm.

Shen also said at the press conference that China's exports will grow at a relatively fast pace in December following a strong growth in November.

China's exports went up 12.7 percent year-on-year in November, up from 5.6 percent in October, customs data showed early December.

But Shen also warned against over-optimism and said exporters are still cautious about the future export situation, citing a recent survey by the ministry which showed the enterprise export confidence index in November was still hovering around the boom-bust line of 100.

"As the US and the EU's economies have gradually picked up and Christmas orders are materializing, December's exports will maintain the same growth pattern as in November," Tang Jianwei, a senior macroeconomic analyst at the Bank of Communications in Shanghai, told the Global Times Wednesday.

"But there is a concern that the recent strong export figures may be inflated as the Chinese mainland's exports to Hong Kong rose quickly again," he said, noting China will achieve its foreign trade target of 8 percent or slightly less than that.