Feb. 20 (Bloomberg) -- Foreign direct investment in China climbed for a sixth month as the effects of the financial crisis faded.
Investment rose 7.8 percent from a year earlier to $8.13 billion, the Ministry of Commerce said in a statement today. The gain compared with a doubling in December.
Companies around the world want to capitalize on China’s stimulus-fueled consumer spending and the fastest growth of any major economy. Inflows of money from abroad add to the flood of cash in the financial system that could lead to asset bubbles and the return of elevated inflation.
“China’s robust growth and expanding domestic market make it an attractive investment destination,” David Cohen, an economist at Action Economics in Singapore, said before the figures were announced.
Gross domestic product expanded 10.7 percent last quarter from a year earlier, the fastest pace since 2007. The government cooled the economy by raising banks’ reserve requirements twice in a month, countering surging property prices and the risk of accelerating inflation after record credit growth.
Friction between the Chinese government and businesses such Google Inc. and Rio Tinto Group isn’t deterring some foreign companies from relying more heavily on China.
Esprit Expansion
Hong Kong-listed Esprit Holdings Ltd., a retailer of casual clothing, accessories and cosmetics, plans to expand to more than 450 cities in China from 150 now, after sales slumped in its biggest market, Germany. Mainland China will be the company’s new “growth engine,” Chief Financial Officer Chew Fook Aun said Feb. 4.
Foreign direct investment in China started to climb in August last year after falling for 10 straight months because of the global financial crisis. China’s $90.03 billion total for 2009 was 2.6 percent less than in 2008, according to commerce ministry figures released last month.
The country’s outbound non-financial investment was $2.36 billion, the ministry said, without giving a year ago comparison.
