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China may receive FDI flows of USD106 bn this year

Beijing: Notwithstanding global economic downturn, China may receive USD 106 billion of the foreign direct investment this year setting a new record, the Chinese Commerce Ministry has said.

From January to June, the nation`s FDI surged by 18.4 percent year-on-year to USD 60.9 billion, an official of the ministry said.

"So far this year, the growth momentum of China`s FDI has been strong. If it can be maintained, China`s FDI will reach a new high point, surpassing last year`s level," state run CCTV quoted Yu Jianhua, assistant to the commerce minister as saying.

China received USD 105.7 billion last year.

But at the same despite the increase for the first half this year, monthly year-on-year growth is declining  In March, China`s FDI growth stood at 32.9 percent, however, the figure weakened to 2.83 percent in June, data from the ministry show.

But the fluctuation does not necessarily mean multi-nationals are losing confidence and holding back on investing in the Chinese market, the report said, adding that the latest yearly World Investment Report of the United Nations Conference on Trade and Development stated that China will remain the most attractive investment destination for the next two years.

According to the report, China absorbed the second-largest volume of FDI in 2010, following the United States, and for the 19th consecutive year was the largest developing economy in terms of FDI and the second-largest worldwide.

"China will maintain its commitment to its strategy of opening the market to the world and effectively utilising foreign investment," Yu said.

Many measures will be taken to do so in the long-term.

"China will open the market wider, especially the service sector, simplifying procedures, such as granting local governments authority to approve FDI proposals, and strengthening its efforts in fighting the infringement of intellectual property rights," Yu said.

In 2010, China`s service sector absorbed 46.1 percent of the total FDI that year, and the western part of the country outperformed the rest in FDI growth.

He Manqing, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the ministry, said: "FDI growth this year is expected to be around 15 percent".

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