FDI Inflow in China Decreased 3.7 Percent, First Time in 3 Years

The FDI inflow of China dipped in for the first time in 3 years. There was a decline of 3.7 percent in the FDI inflow of China over 2012, as per the data revealed by the Ministry of Commerce in Beijing.

However, China still holds its position as the most lucrative FDI destination in the world. It drew 111.7 billion dollar FDI in 2012 in comparison to 116 billion dollar in 2011. FDI flows nevertheless sink in for 7th month in a row in December 2012 with a fall of 4.5 percent in comparison to November 2012.

Analysts are of the view that the foreign players were restricting their investments keeping in mind the taking over of new President of China, Xi Jinping in March 2013, who is expected to liberalise the Chinese economy more. This might lead to relaxation of capital account controls.