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Updated Thursday, January 19, 2012 0:08 am TWN, AFP



	A Beijing bookstore displays Western brand names and Chinese cultural images, Wednesday, Jan. 18. Foreign direct investment in China rose 9.7 percent last year to a record US$116.0 billion, as Asian countries boosted spending despite the global economic turmoil, the government said. (AFP) More Photos (2)

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FDI into China drops in response to US, EU woes

BEIJING -- China's economy is showing signs of slowing, with foreign investment falling for the second straight month in December and home prices dropping in most cities, the government said Wednesday.

The latest indicators came a day after data showed the economy expanded 9.2 percent last year, narrowing from 10.4 percent in 2010, as global turbulence and efforts to tame high inflation put the brakes on growth.

The world's second largest economy is widely forecast to slow even further this year despite efforts to maintain growth by easing credit, with the World Bank Tuesday forecasting growth of 8.4 percent in 2012.

Foreign direct investment in China fell for a second straight month in December, down 12.7 percent year-on-year to US$12.2 billion, as the worldwide slowdown began to take hold, the Ministry of Commerce said.

In November, foreign direct investment registered its first year-on-year decline for a single month since July 2009.

Ministry spokesman Shen Danyang blamed the investment drop on weakness in the U.S. and European economies, and warned the external environment could also hurt exports this year.

“Some major developed economies such as the United States and Europe are weak. Companies are being more cautious in their investment decisions and global multi-national investments have dropped,” he told a news conference.

Overall foreign investment in China held up well last year, rising 9.7 percent to a record US$116.0 billion, as Asian countries boosted spending.

Nonetheless, growth was slower than in 2010, when blistering economic expansion and expectations for a stronger currency led to a 17.4 percent surge in the flow of foreign money.

Inward investment from U.S. companies suffered the most in 2011, plunging 26.1 percent to US$3.0 billion, while European investment registered a fall of 3.65 percent to US$6.4 billion.

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