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China Foreign-Investment Declines for 12th Time in 13 Months

China Foreign-Investment Inflows Show 12th Decline in 13 Months
Pedestrians walk near the Huangpu River with the Lujiazui Financial District in the distance in Shanghai, China. China will step up efforts to stabilize investment inflows next year and expand outflows, state media reported Dec. 16 after an annual economic-planning meeting in Beijing. Photographer: Qilai Shen/Bloomberg

Dec. 18 (Bloomberg) -- Foreign direct investment in China fell for the 12th time in 13 months, suggesting the nation’s economic-growth rebound has yet to attract a fresh influx of capital spending from abroad.

Investment dropped 5.4 percent in November from a year earlier to $8.29 billion, the Ministry of Commerce said in Beijing today. FDI inflows in the first 11 months of the year fell 3.6 percent to $100 billion.

China will step up efforts to stabilize investment inflows next year and expand outflows, state media reported Dec. 16 after an annual economic-planning meeting in Beijing. While factory output and retail sales have accelerated for the last three months, trade and lending trailed forecasts in November, restraining the pace of recovery.

“As China’s economic growth may pick up slightly next year, so may FDI inflows,” Ren Xianfang, a Beijing-based analyst with IHS Global Insight, said before the release. “But don’t expect any big increase partly due to the government’s efforts in curbing the property sector.”

Foreign-investment inflows are likely to be stable next year and won’t drop significantly, Shen Danyang, a ministry spokesman, said at a press briefing today. China’s economy will probably rebound further in 2013 even as slow global growth may continue, Shen said in Beijing.

Home Prices

Separately today, China’s new home prices climbed last month in 53 of the 70 cities the government tracks, data from the National Bureau of Statistics showed today. That was the most in 18 months.

The benchmark Shanghai Composite Index of stocks advanced 0.7 percent at the 11:30 a.m. local-time break, extending a rally that’s pared the decline so far this year to 1.1 percent.

Non-financial investment abroad rose 25 percent in the first 11 months to $62.5 billion, the ministry said yesterday, highlighting the nation’s search for opportunities overseas amid slower growth at home.

Investment from Japan showed a pickup in November, with spending in the first 11 months gaining 11.3 percent from last year, compared with a 10.9 percent rise in the January-October period. Investment had slowed from the first nine months as a dispute between the two nations over uninhabited islands intensified.

In the statement following the policy-setting national conference, there was no mention of seeking “relatively fast” growth, a phrase in place since 2006. Leaders vowed to target “sustained and healthy development” as they maintain a “prudent” monetary policy and “proactive” fiscal stance, according to the statement published by the state-run Xinhua news agency.

Welcome Investors

People’s Bank of China Governor Zhou Xiaochuan said yesterday that China will continue to welcome long-term foreign investors and keep controls on short-term capital flows.

Caterpillar Inc., the world’s biggest construction and mining equipment maker, expects China’s economic growth to increase next year as the government focuses on urbanization, Chairman and Chief Executive Officer Doug Oberhelman said on Dec. 6.

To contact the reporter on this story: Li Liu in Beijing at lliu255@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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