China’s foreign direct investment inflows in January-July fell for the first time in 17 months compared with the same period a year earlier, as firms from Japan, Europe and the United States cut spending in the manufacturing sector.
The weak investment data came as China’s economic growth appeared to be softening again after a hopeful bounce in June, with indicators ranging from lending to output and investment all pointing to more sluggish activity.
But officials described the sudden drop as an anomaly, and stressed the decline was not due to a spate of recent Chinese probes into foreign firms for alleged monopolistic behaviour.
China attracted $71.1 billion in FDI between January and July, down 0.4% from a year ago and its first decline since February 2013. For July alone, China drew $7.8 billion worth of FDI, the least in two years.
“While we are pushing structural reforms in the economy, it is quite normal for FDI flows to fluctuate between months,” Shen Danyang, the spokesman at the commerce ministry, told reporters. “We expect foreign investment to keep a steady growth in the coming years and total FDI in 2014 to remain at the similar level with last year,”
Shen said recent investigations into foreign firms would not dent the appetite of global investors to tap China’s vast