BEIJING—Foreign direct investment in China continued to rise in July, though at a markedly slower pace than in June.
Other July data had shown a slowdown in fixed-asset investment and industrial production, but economists said Tuesday that China will continue to be a hot investment destination despite the single-month fluctuation and despite the slowdown in the global economy, which may have had an impact on the July data.
China attracted $6.92 billion worth of foreign direct investment in July, a 29.2% rise from a year earlier, the Ministry of Commerce said Tuesday. That compared with the June FDI value of $12.5 billion, which represented growth of 39.6% from a year earlier.
"It is difficult to conclude the trend of FDI based on merely one-month data. I am not worried about the FDI outlook," said Ziqiang Xing, economist of the China International Capital Corporation. Mr. Xing said he expects the FDI will grow above 25% in 2010, which would represent an acceleration in FDI growth from the 20.7% growth on year in the January-July period and the 19.6% growth in the January-June period.
He said a slowing global economy may have only a limited impact on FDI as foreign investors are aiming for China's vast market when they inject capital into the country, which looks set to overtake Japan as the world's second-largest economy for the full 2010.
Barclays Capital economist Wensheng Peng said ample liquidity in the U.S. and Europe is likely to encourage more investment in China. "There won't be a sharp slowdown in FDI growth in the future months," Mr. Peng said.
The Ministry of Commerce, which issued the FDI data, didn't offer any analysis of July figures, but said at a briefing China's current export recovery is uneven, and exports growth will likely continue to slow in the next few months.
China aims for more balanced trade, and the trade surplus for 2010 will "surely" fall this year, ministry spokesman Yao Jian said.
The comment came after China recorded its biggest trade surplus in a year and a half for July, due to a big fall in imports growth.
