China FDI inflows continue to drop in Aug

Foreign direct investment (FDI) into the Chinese mainland dropped 14 percent in August from a year earlier, settling at 7.2 billion U.S. dollars, the Ministry of Commerce (MOC) said on Tuesday.

The drop follows a 17-percent slump seen in July - the lowest volume in nearly five years. It's a sign that investors are growing more cautious over the softening strength in the world's second largest economy.

For the first eight months, the FDI, which excludes investment in the financial sector, stood at 78.34 billion U.S. dollars, down 1.8 percent from the same period last year, the ministry said.

In response to a question on whether foreign capital is leaving China at a faster pace, MOC spokesman Shen Danyang said there are no current statistics to support that claim.

"We are still analyzing related investment and trade flows, currently there are no abnormal changes," he noted.

Around 55 percent of the FDI went into the country's service sector during the Jan.-Aug. period. FDI into the manufacturing sector dropped 15.7 percent to 27.5 billion U.S. dollars, accounting for 35 percent of the total.

FDI from major economies slipped, including a 16.9-percent drop from the United States and a 17.9-percent fall from the European Union. Investment from Japan went down 43.3 percent to 3.16 billion U.S. dollars in the first eight months.

Meanwhile, China's outbound direct investment by non-financial firms surged 112.1 percent to 12.62 billion U.S. dollars in August, according to the ministry.