Foreign direct investment (FDI) in China will likely sustain steady growth this year, the Ministry of Commerce (MOC) said Tuesday, highlighting robust inflow in western regions and acquisitions.
"It [annual FDI] may not increase very fast but will maintain the growth momentum seen last year and in the first quarter [Q1] of this year," MOC spokesperson Shen Danyang told reporters.
FDI in western regions posted strong growth in Q1, outpacing the national total with a 42.5 percent jump year on year to reach 21.3 billion yuan (3.3 billion U.S. dollars), he said.
Great potential in the service industry and a relatively low base of comparison contributed to the surge in western regions, Shen explained.
FDI to the Chinese mainland rose 4.5 percent year on year to 224.2 billion yuan in Q1, slowing from 6.4 percent in 2015. But year-on-year growth in March was higher at 7.8 percent, official data showed.
Shen said mergers and acquisitions (M&As) were more active, playing an increasing role in FDI growth.
Investment inflow in the form of M&As rose 32.6 percent year on year in Q1 to 7.8 billion U.S. dollars. It accounted for 22.7 percent of the overall FDI, up from 17.9 percent a year earlier, according to Shen.
M&As by foreign investors remained active in China, he said, counter to a recent report by accounting firm KPMG, which claimed inbound deals fell last year.
The number of foreign-invested M&A deals rose 14.4 percent to 1,466 in 2015, with realized investment soaring 137 percent to 17.8 billion U.S. dollars, Shen noted.
The Chinese government continues to welcome foreign investment through M&As, he said.
