FDI in China slows

BEIJING, May 18 (UPI) -- China's April foreign direct investment rose 15.21 percent from the same month last year to $8.46 billion, but was down sharply from March's $12.52 billion.

April's FDI was driven largely by investments in property sector, the Commerce Ministry said. Property sector investment accounted for 24 percent of the total.

Economists told China's Global Times the slowdown in FDI and other indexes from March indicated the economy is cooling down.

One economist said the economy risks further slowdown if the government continues with its monetary tightening policy to stem inflation.

Total FDI in the first four months of this year ended April totaled $38.8 billion, up 26 percent year-on-year, but investments from the United States fell 28 percent to $1.03 billion during the period.

"We cannot ignore the fact that investment into China from developed nations, including the U.S. is slowing thanks to China's rising labor costs," Zhang Yansheng, director of the Institute for International Economic Research under the National Development and Reform Commission, told China Daily.

Yuan Gangming at the Center for China in the World Economy at Tsinghua University said the United States is "much too reliant on China" for investment to drop over the long term, but also noted U.S. investors "probably have complaints, such as barriers."

Total FDI in 2010 totaled $105.7 billion, the ministry said.