The Ministry of Commerce said that foreign direct investment inflow increased by almost 11% year-over-year indicating that the foreign investors’ interest in the large export base and huge consumption market. In January 2006, FDI increased 10.99% y/y to US$4.55 billion from US$4.1 billion recorded in Januarly 2005. Hong Kong, the British Virgin Islands and Germany were the major sources of FDI during the period under review.
Investment from 15 European Union countries grew 70.8% y/y in January 2006. MOC also said that investment from the U.S. reversed its decline from last year to increase by 19.7% y/y in January 2006. In 2005, U.S. investment to China had declined 22.3% y/y. In Jan 2006, China saw establishment of 3,044 new foreign companies, a decline of 15%. However, MOC did not divulge details of contracted investments. Last year, China saw US$60.3 billion in FDI, marginally lower than the record US$60.6 billion recorded in 2004. MOC expects FDI inflow during this year to maintain the same pace as in 2005.