China Foreign Investment Falls 0.7% in Sixth Monthly Drop
By Bloomberg News - May 15, 2012
Foreign direct investment in China fell for a sixth month in April, the longest stretch of declines since the global financial crisis, amid renewed turmoil in financial markets.
Inbound investment dropped 0.7 percent from a year earlier to $8.4 billion, the Ministry of Commerce said today in Beijing. That compares with a 6.1 percent drop in March.
Today’s data underscore the risk of a deeper slowdown in China after April export and import gains missed estimates and industrial output growth was the slowest since 2009. China cut banks’ reserve requirements on May 12 to spur lending and arrest the deterioration, with UBS AG and Bank of America Corp. lowering their second-quarter and full-year growth estimates.
“Trade data was bad, production data last week was bad, and this time FDI is also pointing to the same direction,”Zhang Zhiwei, chief China economist with Nomura Holdings Inc. in Hong Kong, said in a Bloomberg Television interview today. The reports show a “very weak economy at this moment,” with chances of an interest-rate cut rising though “still below 50 percent,” Zhang said.
The yuan fell against the dollar for the seventh time in eight days, slipping 0.02 percent to 6.3225 as of 12:46 p.m. in Shanghai. The MSCI Asia Pacific Index of stocks dropped 0.9 percent at 1:31 p.m. in Tokyo.
The estimates of five analysts in a Bloomberg News survey on foreign investment ranged from a gain of 8.2 percent to a drop of 3 percent.
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