FDI rises 17% in Jan-Feb

Euro depreciation to boost ODI

The continued depreciation of the euro will attract more outbound direct investment from China, leaving the world's second-largest economy firmly on track to gain more advanced European technologies, assets and human capital.

Boosted by China National Petroleum Corp's $2.89 billion investment in the Netherlands in the first two months of the year, China's ODI into the European Union soared 950 percent year-on-year to $3.36 billion by non-financial companies during this period, according to the Ministry of Commerce on Tuesday.

Shen Danyang, spokesman for the ministry, said though the global demand for investment is still huge, Chinese investors are more inclined to choose Europe and the United States as these markets have well-developed industrial and infrastructure foundations, as well as a mature consumer group and legal environment.

"The depreciation of the euro has lowered Chinese companies' costs as they acquire European companies or set up overseas branches to further expand their international presence and market share," said Shen.

ODI by non-financial firms surged 51 percent to $17.42 billion in the first two months of the year, with the EU, the Hong Kong Special Administrative Region and the Association of Southeast Asian Nations being the top three investment destinations.

However, Shen said the depreciation of the euro has put more pressure on Chinese exports to the European markets, in particular high value-added products.

Commerce Ministry spokesman Shen Danyang also said:

?Beijing is closely watching developments surrounding the possible suspension of plans for a Chinese-funded port city in Colombo, Sri Lanka, and has urged the government there for fairness when it comes to Chinese construction companies investing in the country.

?The Ministry of Commerce is working with other government branches to draw up guidelines for the development of e-commerce in the rural areas. Building information sharing platforms for agricultural production and the sale of agricultural products will be the priorities.

?China's level of foreign trade is actually doing better than official data suggested in the first two months of this year, which were strongly influenced by the timing of Spring Festival in February. The rate should be shown to have improved significantly, when the first-quarter trade data are released in April.