China says foreign direct investment up 45.6 percent

BEIJING, July 11, 2008 (AFP) – Foreign direct investment into China grew by 45.6 percent in the first half of this year, the government said Friday. Foreign enterprises invested 52.4 billion dollars in China from January to June, the commerce ministry said in a statement posted on its website.

The ministry did not give separate data for June alone.

But foreign direct investment was 42.8 billion dollars in the first five months of the year, according to previously released data, meaning 9.6 billion dollars poured into the country last month.

Foreign direct investment, along with booming exports, is one of the top factors behind China’s massive build-up in foreign exchange reserves and excess liquidity in the financial system.

China’s foreign exchange reserves, already the world’s largest, hit 1.80 trillion dollars at the end of May, up more than 17 percent from the end of 2007, triggering government concerns of a surge in hot money inflows.

Speculative money is entering China as investors hope for gains from factors such as the continued strengthening of the yuan.

As part of its efforts to crack down on hot money, China a