OREANDA-NEWS. May 18, 2012. Foreign direct investment (FDI) into China fell for a sixth straight month in April amid global economic woes.
 
In year-on-year terms, FDI edged down 0.74 percent to 8.4 billion U.S. dollars in April, following a 6.1 percent drop in March, 0.9 percent decline in February and 0.3 percent fall in January, the Ministry of Commerce said.
 
The country received 37.88 billion U.S. dollars of FDI in the first four months, down 2.38 percent from a year earlier, MOC spokesman Shen Danyang said at a press conference here.
 
Shen said the ministry was "prudently optimistic" about the outlook for foreign investment, which had dropped because of both the lackluster global economy and rising costs within China. "China's investment environment is improving, not the other way round," he said.
 
He also said he was "neither optimistic nor pessimistic" on foreign trade, adding that the country was likely to post a slightly smaller trade surplus this year than last.
 
Investment from the debt-ridden European Union (EU) plunged 27.9 percent in the January-April period from a year ago. However, that from the United States and Japan climbed 1.9 percent and 16 percent, respectively, Shen said.
 
The continuous falls in FDI inflows were mainly because the deepening debt crisis has forced EU enterprises to cut overseas investment, said Li Huiyong, chief economist with Shenyin and Wanguo Securities.
 
Meanwhile, economic uncertainties within China because of its economic adjustment also has shaken investors' confidence, Li said.
 
China's economy expanded 8.1 percent in the first quarter from one year earlier, the least in almost three years. The country's central bank announced Saturday that it would cut banks' reserve requirement ratio by 0.5 percentage point, effective from May 18, to spur lending and stabilize growth.
 
Teng Tai, economist of China Minzu Securities, said the continuous FDI declines were normal as the country changed its foreign investment policy from the pursuit of "quantity" to "quality."
 
The nation approved the establishment of 7,016 foreign-invested companies in the first four months, down 13.94 percent from a year ago.
 
However, as investment into China drops, the country's outbound investment has surged. The country's non-financial overseas direct investment totaled 23.16 billion U.S. dollars in the first four months, up 72.8 percent from a year earlier.