China’s Foreign Direct Investment Declines for Second Consecutive Month

Foreign direct investment in China fell for the second straight month in December as global financial turmoil dimmed companies’ appetite for spending. Investment from overseas fell 12.73 percent to $12.24 billion last month from a year earlier, the Ministry of Commerce said in a statement in Beijing today.

For the full year, spending rose 9.72 percent to a record $116 billion, the data showed. Investment fell 9.8 percent in November, the first decline since 2009. China announced amendments to policies to attract foreign funds last month, changes that may weigh on spending in some industries this year.

Europe’s debt crisis and anticipated weaker growth in the U.S. this year may also limit investment, with central bank Governor Zhou Xiaochuan warning this month a global downturn could lead to “large” capital withdrawals from the country. More...