Foreign Investment in China continues to fall

Since the beginning of this year, mainland China has been receiving $83.4 billion in foreign investments. This period marks the longest continuous drop in incoming FDI since the global financial crisis of 2008. As of October 19th, it is clear that this trend is yet to be reversed as news of a continued decline in investments were issued by the Ministry of Commerce.
This follows a minor recovery in September, when government measures intended to stabilize growth had started to show positive results. More recent signals – specifically a set of economic data indicating hopeful developments in GDP, retail sales and industrial output numbers that was released yesterday – had also pointed to a similar direction. Today, the disappointing news about FDI were followed by losses in Shanghai Composite Index stocks. Producers of non-ferrous metals and gold saw their stock prices fall from the morning hours onwards.
Although FDI continues to decline, the official goal set by the Chinese government – an average of $120 billion in foreign investment per year – is still well within reach. Also, a year-on-year drop might come as less of a surprise considering that 2011 was a record year with $116 billion in FDI.