FOREIGN direct investment in China edged up 0.05 percent from a year earlier in May, ending a six-month losing streak and indicating foreign investors' renewed confidence in the world's second-largest economy. With the small but encouraging increase, inbound foreign investment rose to US$9.23 billion, the Ministry of Commerce said yesterday. The gain was in contrast to the 0.74 percent drop in April and the slump of 6.1 percent in March.
"Foreign investment has started to grow again, which is a good sign as it shows the strength of China's economy and its attractiveness to investors," said Xue Jun, an analyst at CITIC Securities Co. "It is hard to predict whether the growth will carry on, but at least it can bolster sentiment in China."
The ministry did not provide detailed figures this time round to show the origin of the foreign fund, but analysts said the growth may have been generated by increasing capital from Asia and the United States.
In the first five months, foreign investors channeled US$47.1 billion into China, down 1.91 percent from a year earlier.
Shen Danyang, a ministry spokesman, said earlier that China remained one of the world's most attractive destinations for foreign investment due to the country's improving business environment and its resilient economy.
According to a recent report by the Japan Bank for International Cooperation, China and India remain the top two investment destinations for Japanese manufacturers seeking overseas expansion.
Singapore's United Overseas Bank also listed China as the best choice for investment in the world in its latest report.