Foreign Investment In China Continues To Rise

Foreign direct investment rose 7.8 percent in January to $8.1 billion in latest sign that recovery in world's third largest economy is on track.

BEIJING (AP) -- China's foreign investment rose for a sixth straight month in January in a new sign that recovery in the world's third largest economy is on track, government figures showed Monday.

Foreign direct investment rose 7.8 percent in January from a year earlier to $8.1 billion, the Commerce Ministry said. That was below December's growth rate, but China's economic data in the first two months of the year are distorted by the Lunar New Year holiday, which results in fewer working days.

"While the monthly data is quite volatile, investment has been on a moderately improving track for most of 2009 and this should continue into the early months of 2010," said Alaistair Chan, an associate economist of Moody's, in a note.

China's foreign direct investment plunged in 2008 as companies cut back spending amid the global economic crisis but began to rise again in August. FDI includes spending on factories, real estate and other assets but excludes investment in stocks and other financial instruments.

China's economic growth accelerated to 10.7 percent in the final quarter of 2009, up from a low of 6.1 percent in the first quarter, driven by a 4 trillion yuan ($586 billion) stimulus package. Consumer spending also is rising.

In December, FDI more than doubled from a year earlier to $12.1 billion.

China's total foreign direct investment in 2009 fell 2.3 percent to $90 billion, still high against the backdrop of the global crisis.

Associated Press researcher Bonnie Cao in Beijing contributed to this report.

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