Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Monday, February 18, 2008

Foreign Investment in China January 2008

Foreign direct investment in China more than doubled in January from a year earlier, adding to the flood of cash that threatens to overheat the world's fastest- growing major economy. Spending by overseas companies and individuals climbed 110 percent to $11.2 billion, according to data released by the Ministry of Commerce today. In whole year 2007, investment increased 13.6 percent to $74.8 billion the Ministry said.

Meantime in separate news we learn today that China's producer prices rose at the fastest pace in more than three years as energy costs surged, adding pressure for more government measures to tame inflation. Factory-gate prices increased 6.1 percent in January from January 2006, according to data from the statistics bureau.In December the PPI rose a y-o-y 5.4 percent.

The producer price of crude oil surged 29.9 percent in January from a year earlier and that of ferrous metals soared 17.3 percent. Food prices jumped 10.4 percent.

China's trade surplus jumped 23 percent in January from a year earlier to $19.5 billion. Money supply rose 18.9 percent, the biggest gain in 20 months. The People's Bank of China raised interest rates six times in 2007 and has ordered lenders to set aside more deposits as reserves on 11 occasions since the start of last year, pushing the ratio to 15 percent, the highest ever. The central bank has also sold bills to drain cash from the financial system and capped banks' loan growth.

Government restrictions and higher taxes aren't deterring investors from ventures in the world's fourth-biggest economy. The government is also steering investment away from the eastern coastal cities and into less-developed regions in the west and the center. The country's five-year plan, running through 2010, also aims for a shift from assembly work to designing and producing high-technology brands.

China's economy, the world's fourth largest, expanded 11.4 percent in 2007 from a year earlier, the fastest pace in 13 years.

No comments: