FOREIGN direct investments (FDIs) in China rose 6.2 per cent on year in the first nine months of this year, the government said yesterday, but it warned the world's number two economy still faced domestic and external headwinds.
And while the commerce ministry said Chinese investment overseas had increased sharply over the first nine months of the year, the amount of cash going to Japan had almost halved as a diplomatic row with Tokyo drags on.
Beijing said foreign direct investments, which excludes financial sectors, reached US$88.6 billion (RM278.7 billion) for January-September.
For September alone, Chinese FDI appreciated by 4.9 per cent to US$8.84 billion, well up from the 0.62 per cent rise seen in August. But the figure is sharply down from 24.13 per cent seen in July and 20.12 per cent in June.
Ministry spokesman Shen Danyang said the size of full-year foreign direct investment was expected to be "stable", but noted that uncertainties remained.
"Given the complex and changing global economic situation, the sustained and stable growth of the Chinese economy is facing pressure and challenges such as insufficient foreign demand and rising labour costs," Shen told reporters a news conference.
"These will affect to some extent China's foreign investment environment," he said.
The amount of money coming from the European Union rose 23 per cent year-on-year to US$5.94 billion during the January-September period, while from the United States it increased 21.3 per cent to US$2.88 billion.
The vast majority, however, comes from a group of 10 Asian countries and regions including Hong Kong, Taiwan, Japan, Thailand and Singapore.
Foreign investments from the region jumped 7.5 per cent to US$76.3 billion in January-September.
"Investment from the 10 Asian countries and regions, the European Union and the United States maintained rather fast growth," the commerce ministry said.
Separately, Chinese investment abroad rose 17.4 per cent year-on-year to US$61.64 billion during the nine months, the ministry said.
However, the amount of cash going to Japan slumped 45.5 per cent. The plunge comes as the two countries are embroiled in a sovereignty dispute over islands they both claim in the East China Sea - known as Diaoyu in China and Senkaku in Japan.
The long-simmering tensions boiled over in September last year, when Tokyo nationalised the islands, sparking a bitter diplomatic stand-off.
Despite the row, Japanese investment in China during the first nine months rose 5.62 per cent to US$5.94 billion.
After data last weekend showed a surprise fall in September exports Shen added that China's trade "is still facing a severe and complicated external environment".
He singled out sharply slowing growth in emerging markets that has dampened demand for Chinese goods.
But the government is still confident that trade will maintain "stable development" and expects exports to see marginal growth in the next two months thanks to supportive policies and an improving domestic economy, Shen said. AFP