Sunday, August 16, 2009

FDI Falls in China

Foreign direct investment in China fell for a tenth straight month in July as companies stalled expansion plans amid the global financial crisis. 

Investment declined 35.7 percent from a year earlier, the commerce ministry said at a briefing in Beijing today. That compared with a 6.76 percent drop in June. 

Source: Bloomberg

This can be a problematic especially when the fastest growing economy in the world is not receiving as much foreign direct investment as they did last year. The government is providing loans to the locals, however this can only last so long as their monetary policy sees fit. FDI is the true growth driver for many emerging economies. Another reason to be cautious with this global recovery. Times are getting better, but not enough to feel that your job is safe, and that the good times are back.

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