China's FDI up 7.8% in May

Growth in foreign investment in China slowed to 7.8 percent in May, the commerce ministry said on Thursday, but outward investment surged almost 50 percent in the first five months of the year.

Foreign direct investment (FDI), which excludes financial sectors, increased to $9.33 billion last month, the commerce ministry said, after a 10.5 percent year-on-year rise in April.

"I think foreign direct investment will continue to grow steadily," Shen Danyang, ministry spokesman, told reporters after a briefing at which the figures were released.

The ministry said in a statement that overseas direct investment (ODI) from China rose 47.4 percent to $45.41 billion in January-May. It did not provide data for May alone.

China drew a total of $119.6 billion of FDI in 2014, up 1.7 percent, while ODI was up 14.1 percent at $102.9 billion and passing the $100 billion mark for the first time as Chinese companies look elsewhere with the domestic economy slowing.

China's economy, the world's second biggest, expanded 7.4 percent last year, the weakest since 1990, and slowed further to 7.0 percent in the January-March period, the worst quarterly result in six years.

For the first five months of the year, FDI increased 10.5 percent to $53.83 billion, the ministry said.

In the January-May period, investment from the 28-member European Union (EU) rose 23.2 percent to $3.31 billion, the ministry said, adding that inflows from France surged 91.3 percent to $610 million, it said.

But from Japan, with which China is in disputes over territory and wartime history, investment fell 9.4 percent to $1.78 billion.

Investment from the United States also decreased, falling by 32.6 percent to $970 million.

China's investment in the US, however, grew 37.4 percent in the period, the ministry said without giving the value.

Shen said the strong recovery momentum in the United States has encouraged investors to pour more funds into the country.

"A country attracts capital when its economy grows fast," he said. "The economy in some EU countries and regions is still in the doldrums, therefore their companies increased outward investment."

FDI growth has slowed in recent years owing to rising costs, competition from Southeast Asian countries and concerns over official investigations. However, China's acquisition of foreign assets, particularly energy and resources, has become more active with firms encouraged to invest abroad to gain market access and international experience.

Investment from China into the EU surged 367.8 percent, it said, without giving totals or details.