Services lead growth in foreign direct investment in China

China's foreign direct investment reached a new high in the first six months of the year, the Ministry of Commerce said yesterday.

Foreign investors channeled 420.5 billion yuan ($68.4 billion) into the country during the January-June period, up 8.3 percent from a year earlier, with 11,914 new foreign-invested firms set up.

The growth was led by funds in services, which expanded 23.6 percent year on year to $43.4 billion in the first six months and were 63.5 percent of the total. Capital for the financial sector increased nearly five times and that for scientific research more than doubled.

Investment in manufacturing contracted 8.4 percent to $20.8 billion, or 30.5 percent of the basket. However, foreign input in advanced manufacturing bucked the trend. Funds flowing into telecom equipment manufacturing and chemical manufacturing rose 231 percent and 71.9 percent respectively during the period.

The European Union directed $4.08 billion into China in the first six months, up 13.7 percent year on year. But the United States cut its investment by 37.6 percent to $1.09 billion, partly due to a high comparative base.

In June alone, China's foreign direct investment rose 0.7 percent to $14.5 billion, moderating from May's 7.8 percent.

Meanwhile, China's outbound direct investment rose 29.2 percent to 343.2 billion yuan in the first half, with funds flowing into 4,018 overseas companies in 147 countries and regions.

The pace compared with the rate of 47 percent in the January-May period.

Investment in the ASEAN countries nearly doubled during the period, while more than $7.05 billion was directed to 48 countries involved in the "Belt and Road" initiative.

Shen Danyang, a spokesman for the commerce ministry, said that China remained a target in trade disputes in the first six months as the country was involved in 37 cases raised by 14 countries and valued at $3.5 billion.

"Although the number of cases and the overall value reduced, China remained a major victim of trade disputes, and more of these cases are now related to high-tech or high-value-added sectors," Shen said.