UPDATE 3-China FDI jumps, set to attract $100 bln for full year

* Commerce ministry sees record inflows for full year

* Jan-Nov FDI up 18 pct vs 2009

* Service industry emerging as focal point-spokesman

(Adds spokesman’s quotes)

By Aileen Wang and Simon Rabinovitch

BEIJING, Dec 15 (BestGrowthStock) – China is on course to attract
a record $100 billion in foreign direct investment this year,
the commerce ministry said on Wednesday, evidence that it
remains a top destination for global firms despite concerns
about market barriers and rising labour costs.

China attracted $91.7 billion in foreign direct investment
(FDI) in the first 11 months of 2010, nearly 18 percent more
than in the same period of 2009, the ministry said.

Along with the general attraction of investing in the
fast-growing Chinese economy, spokesman Yao Jian said the
service industry had emerged as one focal point for foreign

“The service industry has become the major driving force
of the growth in foreign direct investment, which also chimes
with the government’s goal of adjusting the economic
structure,” Yao told the regular monthly briefing, referring
to Beijing’s goal of boosting domestic consumption and relying
less heavily on exports.

Top U.S. and Chinese officials are holding high-level
trade talks ending Wednesday in Washington on issues ranging
from intellectual property rights to investment restrictions
and barriers to markets. [ID:nN14288545]

Major global firms like General Electric have
expressed concerns that Beijing’s “indigenous innovation”
policies could hinder its ability to compete in China.

But Yao gave an optimistic outlook for the world’s
second-largest economy.

“With China’s economy (Read more about the fastest growing economy.) rising further in the future,
investment in the manufacturing sector will maintain a stable
growth pace and service industry investment will continue to
speed up,” he added.

Investment in the services industry accounted for 44.9
percent of total FDI in the first 11 months, compared with
40.9 percent in the same period a year earlier. Yao noted that
computer services and real estate were two sectors in which
investment was increasing particularly quickly.


The mix of foreign investors in China was tilted heavily
towards its Asian counterparts. Hong Kong, Taiwan, Singapore
and Japan have been the biggest investors in China so far this
year, with the United States only in fifth place.

In November alone, China attracted $9.7 billion in FDI, up
38 percent from the same month of 2009, the ministry said.

Inflows, which surged in the years after the country
joined the World Trade Organisation in 2001, were hit hard by
the global economic slowdown, but have staged a recovery this

Although China has a tight regime of capital controls,
there is concern that some hot money has been entering the
country in the guise of legitimate trade and investment flows.
Yao said the commerce ministry would work to ensure that no
FDI cash was being illegally redirected into asset markets.

“Our ministry will take further efforts to check the
authenticity of foreign capital invested in property,” he added.

(Editing by Kazunori Takada)

UPDATE 3-China FDI jumps, set to attract $100 bln for full year