China's foreign direct investment (FDI) continued its upward growth from January to November although the month of November experienced a slowdown.
Analysts said the slowing is just normal fluctuations and does not affect the future growth of China's foreign investment.
According to statistics released by the Ministry of Foreign Trade and Economic Co-operation (MOFTEC), used foreign direct investment in China hit US$48.01 billion in the first 11 months of this year, up 14.59 per cent from the same period last year.
In the first 11 months, a total of 30,728 foreign-funded enterprises were established in China, an increase of 34.1 per cent over the same period last year.
Contractual foreign investment rose 27.38 per cent to US$76.95 billion in the period, MOFTEC figures showed.
Since adopting opening-up and reform programs in the late 1970s, the country has approved the establishment of 420,753 foreign-funded enterprises with a contractual foreign investment of US$822.24 billion and used foreign investment of US$443.2 billion by the end of November, MOFTEC said.
Investments in November alone however shrank to US$3.29 billion compared to October's US$5.2 billion and US$5.1 billion in September.
The slump does not indicate that China's booming FDI has stopped or has passed its peak, said Sun Xiaohua, a senior expert on foreign investment at the Chinese Academy of International Trade and Economic Co-operation.
"Based on statistics in previous years, we can assume that growth in FDI is often volatile," Sun said.
"You can not expect the growth in FDI to be as stable as industrial output because more outside elements are involved."
There may be technical reasons behind the investment slowdown, such as approval procedures, Sun added.
Sun forecast the FDI to China will increase next year.
November's slowdown should not impact foreign-investor confidence in the country, Sun said.
When asked whether the FDI will reach US$50 billion in 2002 with only one month remaining, Sun said the focus should not be placed on the number but on the quality of the investment.
China drew US$46.85 billion in foreign investment last year.
The inflow of foreign funds has been an important driver of China's economy, which grew a robust 7.9 per cent in the first nine months of this year and is widely expected to grow to around 8 per cent for the entire year.
The United Nations has said China is poised to edge out the United States - where investment has dropped dramatically due to the weak economy - for the first time as the largest recipient worldwide.
Foreign firms have poured money into China during the first year of its entry into the World Trade Organization, hoping Asia's second-largest economy will open wider to the world.
Investors are also drawn to the cheap cost of setting up shop in China and many foreign-funded factories have been cranking out goods to be shipped abroad, helping fuel a boom in Chinese exports this year.
(China Daily December 13, 2002)
