Chinese FDI dropped to 4-year low

Noam Stiekema

The Chinese Foreign direct investment (FDI) plunge to 4-year low amid investigations against a number of multinational companies accused of violating local laws and unleashed a wave of discontent with USA. The boundaries of the Asian country have crossed 7.2 billion USD in August. This is 14% and 17% less than a year and a […]

Chinese FDI

Chinese FDIThe Chinese Foreign direct investment (FDI) plunge to 4-year low amid investigations against a number of multinational companies accused of violating local laws and unleashed a wave of discontent with USA. The boundaries of the Asian country have crossed 7.2 billion USD in August. This is 14% and 17% less than a year and a month earlier, according to the latest data from the Ministry of Commerce of China. Bimonthly declines are the first double-digit reductions since 2009, shows a reference to the news agency.

For the first eight months of 2014, FDI fell by 1.8% year on year to 78.3 billion USD. For comparison – the investment of Chinese companies abroad jumped 15.3% to 65.2 billion USD. The US Treasury Secretary Jack Lew accused Chinese authorities of using antitrust laws to force companies to cut prices to domestic consumers pay for their products. According to Liu such action would have a negative impact on bilateral trade relations, revealed to Bloomberg anonymous person familiar with the conversation.

FDI declines in July and August “not related” to the country’s anti-monopoly measures, assures trade ministry spokesman Shen Danya. The Liu’s complaint comes after criticism of the major European and American business lobbies in China. According to them, the authorities in the second largest economy discriminate against foreign corporations. Against a number of foreign companies are under investigation. In July antitrust authorities have started this against Microsoft, and state media have accused Apple, it uses its iPhone models to access public information.

Actions of regulators and the decline in foreign investment generates additional risks amid concerns that the Chinese government may not achieve projected for this year economic growth of 7.5%. The latest data on FDI come after the publication of information that industrial production growth was the weakest since the financial crisis.

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