China saw a further decrease in foreign direct investment (FDI) in July as multinational groups are still cautious about the prospect of the world’s third largest economy, economists said.
FDI dropped by 35.7 percent year-on-year to 5.36 billion USD in July, according to the Ministry of Commerce.
Research by economist Lu Zhengwei of the Industrial Bank showed that the FDI fluctuation related to the changes of cash flow.
Tao Dong, an economist with the Credit Suisse also said that FDI decline reflected the abnormality of cash flow in the international credit market, and it was not caused by factors in the country.
Changes of FDI flow in the country are not abnormal, especially in summer, he added.
FDI flow in China experienced consecutive falls in 10 recent months due to the negative impacts of the global economic crisis.
In the first seven months of this year, the country received a total 48.3 billion USD of FDI, a year-on-year decrease of 20.35 percent. However, during the past 13 years, FDI attraction often decreases in June and July.
Both economists Lu and Tao agreed that FDI decline does not affect the country’s economic recovery./.