China Draws 12% More Foreign Investment in First Half (Update7)
July 13 (Bloomberg) -- China attracted 12 percent more foreign direct investment in the first half as companies including Sony Corp. and General Motors Corp. sought to tap booming demand in the world's fastest-growing major economy.
Investment rose to $34 billion in the half, after gaining 7.5 percent in the first quarter from the year-earlier period, the Beijing-based Ministry of Commerce said on its Web site. The Ministry didn't give a growth figure for the second quarter.
China overtook the U.S. last year as the world's biggest recipient of foreign direct investment, drawing $53 billion, according to the Organization for Economic Cooperation and Development. Premier Wen Jiabao is relying on attracting overseas investment to help create 14 million jobs this year, even as he reins in indiscriminate expansion by state-owned companies.
``China doesn't want to slow down foreign investment because it's valuable to the economy and brings in foreign expertise,'' said Joseph Lau, an economist at Credit Suisse First Boston in Hong Kong.
Rising investment by foreign companies is fueling an export boom that's stoking growth in the world's seventh-largest economy. China's economy expanded 9.8 percent from a year earlier in the first quarter, outpacing growth in the rest of the world's 20 largest economies.
Contracted Investment
Overseas sales soared 47 percent to a record $51 billion in June, the commerce ministry said yesterday. Robert Subbaraman, a Tokyo-based economist at Lehman Brothers Japan Inc., estimates that more than half of China's exports are made by foreign companies.
Last year's foreign investment in China was larger than the $40 billion attracted by the U.S., the world's biggest economy, and the $6.47 billion that was invested in South Korea, Asia's third-largest economy.
Contracted foreign investment in China, a sign of future investment, rose 43 percent to $73 billion in the first half, today's statement showed.
General Motors, Volkswagen AG, Ford Motor Co. and Toyota Motor Corp. have announced plans in the past year to invest about $10 billion in China, the world's fastest-growing auto market. Less than three in 1,000 Chinese households own a car, said Ashvin Chotai, an analyst at Global Insight Inc., a Lexington, Massachusetts based auto consulting firm.
Cars
General Motors, the world's largest carmaker, last month announced plans to move its Asia-Pacific head office to Shanghai and build a $250 million testing ground in the city that will be the largest outside its home state of Michigan.
``Having a strong presence in this dynamic and growing market is not an option anymore, it's a necessity,'' Chief Executive Rick Wagoner told reporters at a press briefing in Shanghai on June 23.
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