China to see steady FDI growth in H2: think tank

Foreign direct investment (FDI) in China will maintain steady growth in the second half of 2016 (H2), due to a stable economy and an improved business environment for foreign firms, according to a think tank report.

FDI will grow approximately 4 percent year on year in H2, according to the State Information Center, an institution affiliated with the National Development and Reform Commission.

The country's resilient economy, sound infrastructure and huge market will continue to appeal to foreign investors, the report said.

Moreover, China has lowered the threshold for foreign investment by adopting a "negative list" for the country's free trade zones and is also piloting reforms to further open up the service sector, the report said.

However, it predicted that some factors may subdue FDI growth, such as further depreciation of the yuan, as well as rising costs and falling profits in China's labor-intensive industries.

In the first seven months of 2016, FDI in China rose 4.3 percent year on year, down from 5.1 percent in the first six months, official data show.

Meanwhile, the report forecast a year-on-year increase of more than 20 percent in China's outbound direct investment (ODI) in H2, largely due to interest from domestic firms and lower investment costs in a sluggish global economy.

Rising geopolitical risks and tightening restrictions over inbound investment in some countries will pose challenges for the country's overseas investment, the report said.

China's ODI soared over 61 percent year-on-year in the first seven months, official data showed. Endi