The Chinese economic slowdown finally had an impact on the Asian giant’s FDI inflows, as the December 2015 figures show a decline of 5.8% YOY basis, the first yearly decline since August 2014.
Official data, released on Wednesday, January 20 shows China received USD 126.27 billion last year registering a 6.4 per cent increase.
Foreign Direct Investment (FDI) in December stood at 77.02 billion yuan (USD 12.2), Ministry of Commerce spokesperson Shen Danyang told a press conference. He attributed the decline to a higher base in the same month of 2014 as well as changing currency trends and market conditions, but did not elaborate.
The Chinese currency, yuan, has been weakening since China's central bank revamped the foreign exchange mechanism in August 2015, saying it was making the rate more market- based. The weakening of yuan was influenced by the start of a new rate-hike cycle in the US and a slower Chinese economy.
Despite the FDI decline in December, Shen said the total FDI for the whole year of 2015 rose 6.4 per cent from 2014 to USD 126.27 billion. China's FDI growth saw ups and downs in the first 11 months of 2015.
It accelerated to 22 per cent in August before winding down to 1.9 per cent in November.
In December, more than 2,000 foreign-funded enterprises were newly established in the mainland, up 17.9 per cent year on year, Shen said.
He said the country’s Out Bound Investment (ODI) for 2015 hit an all-time high of USD 118 billion, with investment in ASEAN member countries and the United States soaring more than 60 per cent year on year.
ODI rose 6.1 per cent year on year in December, slowing from a 12.6 per cent increase in November, he said. China brought in 86.5 billion yuan (USD 13.89 billion) of ODI in December, Shen said.
Despite the global economic downturn, Chinese companies remained active in overseas mergers and acquisitions (M&A) last year, which have become a key mode of overseas investment, he added. Chinese firms carried out 593 M&A deals worth USD 40.1 billion in 2015, Shen said.
He cited the purchase of a nearly 60-per cent stake in Italian tire maker Pirelli by China National Tire & Rubber Co. Ltd. as the biggest outbound acquisition by a Chinese firm in 2015.
