China January foreign direct investment rises in sign of confidence

[cirr]

China January foreign direct investment rises in sign of confidence

BEIJING Tue Feb 18, 2014 6:11am EST

People stand outside a UNIQLO shop in Beijing, August 24, 2013.

Credit: Reuters/Petar Kujundzic

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BEIJING (Reuters) - China drew $10.76 billion in foreign direct investment (FDI) in January, up 16.1 percent from a year earlier, the Commerce Ministry said on Tuesday, a sign that confidence in the world's second-largest economy remains firm even as growth cools.

The majority of the new investment, some $6.33 billion, went into China's services industry, while investment in manufacturing fell 21.7 percent, the ministry said.

Ministry spokesman Shen Danyang told a media briefing that China's economic reforms and opening up of the services sector, helped boost confidence of foreign investors.

"The double-digit growth in FDI in January answered the question of whether China's investment environment remains favorable," Shen said.

"We expect foreign direct investment to maintain sound momentum this year."

China has shifted its focus on attracting FDI inflows to high-end manufacturing, a modern services sector and energy saving and environmental industries, Shen said.

FDI in China's distribution services sector rose 7.4 percent in January from a year earlier, while FDI in the telecommunications equipment and computer sector rose 9.2 percent and that in the transportation equipment sector tumbled 62 percent.

China has attracted a steady flow of foreign investment every year since joining the World Trade Organization in 2001, as businesses jumped at the chance to enter the world's most populous country.

FDI inflows into China in 2013 rose to a record $117.6 billion.

In January, investment from 10 Asian countries and regions, including Hong Kong, Taiwan, Japan and South Korea, rose 22.2 percent to $9.55 billion. Investment from the United States rose 34.9 percent to $369 million while that from the European Union fell 41.3 percent to $482 million.

The investment comes even as China's economy show signs of slowing from the stellar growth rates of years past as the government looks to shift the emphasis to structural reform rather than growth for its own sake.

One pillar of the reform drive is to make the economy driven more by the service sector and consumers, ending its traditional reliance on investment and exports for growth.

CHINA INC EXPANDING ABROAD

At the same time, the ministry's data showed more Chinese companies are expanding abroad. Outbound FDI in January was $7.23 billion, up 47.2 percent from a year earlier.

The rise in outbound FDI in January was led by a 500 percent jump in investment in Japan, the ministry said without elaborating.

Chinese firms have been quickening the pace of overseas purchases in recent years, with their footprint expanding from Asia to Africa and Europe.

In January alone, computer maker Lenovo Group spent over $5 billion on two high-profile acquisitions in the United States [ID:nL3N0LH3UU].

Ministry spokesman Shen also played down the impact of fake export deals in China's strong trade performance in January, which he attributed to a recovery in developed economies and favorable policies.

"Some individual analysts believe that the rapid export growth was driven by falsified deals. We think that's just a guess, which is unfounded," he said.

The value of China's exports climbed 10.6 percent in January from a year earlier, more than five times market forecasts for a 2 percent rise. Some market watchers suspected the figures were inflated by fake trade deals which firms used to sneak cash into the country past capital controls.

China's total trade grew 7.6 percent in 2013, below the official target of 8 percent.

The Commerce Ministry has pledged to maintain steady trade growth in 2014 and further balance its trade structure by increasing imports of raw materials and energy products.

(Reporting by Kevin Yao; Writing by Jonathan Standing; Editing by Kim Coghill)

China January foreign direct investment rises in sign of confidence| Reuters

 

[rott]

Good News!

 

[Chinese-Dragon]

Good News!

Fantastic news.

We already had record-breaking FDI inflows last year, and this year it has gone up by 16% already compared to last year!

Exports jumped by 10.6% as well compared to last year. I am really liking this data.

 

[cirr]

Agence France-Presse February 12, 2014 4:39pm

China trade surplus rebounds in January

China's trade surplus surged in January, according to data Wednesday showing exports strengthened markedly in a potentially brighter note for the world's second-biggest economy after recent disappointments -- although economists suggested the numbers could be distorted.

The surplus rose 14.0 percent year-on-year in January to $31.86 billion, the General Administration of Customs said, rebounding from a decline the previous month.

Exports jumped more than expected, increasing 10.6 percent to $207.13 billion, while imports were up 10.0 percent at $175.27 billion.

The median forecast in a survey of 11 economists by The Wall Street Journal predicted only a 0.1 percent increase in exports, which had risen 4.3 percent in December. In that month, the overall trade surplus fell 17.4 percent year-on-year to $25.64 billion.

The strong results surprised economists, who suggested they were driven by disguised capital flows instead of real demand.

"We find this strong level of export growth puzzling," Zhang Zhiwei, economist at Nomura International in Hong Kong, wrote in an analysis, adding it was "unclear to what extent" it indicates "true strength" in China's economy.

"At this stage, we believe capital inflows may have contributed at least partly to January's strong export growth numbers."

Economists have long taken Chinese economic statistics with more than a grain of salt.

Early last year unusual swings in trade figures were seen as driven by over-invoicing by exporters and importers in a bid to disguise capital flows, a practice the government is believed to have cracked down on later.

"While this could reflect an improving external demand, we suspect that export over-invoicing activities have re-emerged," Liu Li-Gang and Zhou Hao of ANZ bank wrote in a report.

"It is important to note that China's regional trading partners such as Taiwan and South Korea registered very weak January exports," they added.

Stronger-than-expected import growth, meanwhile, suggested "a front-loading effect before the Chinese New Year", they added, referring to the country's week-long holiday that ended last week.

China's annual trade in goods passed the $4 trillion mark for the first time in 2013, when the country probably surpassed the United States as the world's largest physical trading nation.

But recent signals for the economy have been mixed.

China's official purchasing managers' index (PMI), a gauge of its manufacturing sector, slipped to a five-month low in January, confirming a slowdown in factory activity.

British bank HSBC, meanwhile, announced that China's manufacturing sector shrank in January for the first time in six months, with its PMI index recording 49.5, placing it in contraction territory.

January's trade and manufacturing results came after China's economy registered flat growth of 7.7 percent in 2013, maintaining its slowest expansion in more than a decade.

Gross domestic product (GDP) expansion for the October-December quarter also came in at 7.7 percent, the National Bureau of Statistics said last month, slowing from 7.8 percent in the previous three months.

The 2013 GDP figure was the same as that for 2012 -- which was the worst rate of growth since 1999 -- although it exceeded the government's growth target for the year, which was declared as 7.5 percent.

China's economy is expected to slow to 7.5 percent this year, according to the median forecast in a survey of 14 economists by AFP last month.

China is a key driver of the global economy but is widely seen as facing slower expansion in the years ahead.

Its leaders have vowed to change its growth model so that consumers and other private actors play the leading role, rather than huge and often wasteful state investment.

Within the past decade Chinese growth was regularly in double digits, but it has been on a slowing trend and the 2013 GDP result showed growth in single figures for three consecutive years for the first time since 2002.

China trade surplus rebounds in January | GlobalPost

 

[Chinese-Dragon]

We are right in the middle of a huge economic transition as well, away from an investment-driven economy towards a more consumer-driven economy.

So you kind of expect bad news in the short term. Transition periods are always painful.

But the news is really quite good.

All that stuff we are manufacturing, more of it should be consumed our own domestic Chinese market. With such a huge population this can be a super economic driver.

 

[Chinese-Dragon]

China's economy: The world's second biggest consumer | The Economist

 

[Genesis]

wow, wow, wow, I'm afraid these are false Commi propaganda reports, let's get Gordon Chang on the scene, he'll tell the truth.

 

[Chinese-Dragon]

wow, wow, wow, I'm afraid these are false Commi propaganda reports, let's get Gordon Chang on the scene, he'll tell the truth.

Gordon Chang.

I don't know how he still has enough shame to still be around, after he predicted China would collapse in 2006, 2008, 2010, 2011, and the latest one in 2012.

The Coming Collapse of China: 2012 Edition - Foreign Policy Magazine

In the middle of 2001, I predicted in my book, The Coming Collapse of China, that the Communist Party would fall from power in a decade, in large measure because of the changes that accession to the World Trade Organization (WTO) would cause. A decade has passed; the Communist Party is still in power. But don't think I'm taking my prediction back.

So, yes, my prediction was wrong. Instead of 2011, the mighty Communist Party of China will fall in 2012. Bet on it.

Priceless.

 

[Hakan]

China will replace the u.s and western consumers with its own and with those of other developing countries. They know what will happen in the future which is why china is stocking up on gold.