China’s foreign investment up 109 percent

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The Associated Press

BEIJING_China attracted $11.2 billion in foreign investment in January, up 109.8 percent from the same month last year, the government said Monday.

The Commerce Ministry, which reported the figure in a one-sentence statement, gave no explanation for the sharp rise. China’s economy is growing strongly at a time when investors are worried about a slowdown in the United States, and companies are racing to cash in.

The number of new foreign-financed companies rose by just 13.4 percent from the same month last year, suggesting investors were shifting to bigger, more capital-intensive projects.

A total of 2,918 companies were created by foreign investors in January, the Commerce Ministry said. The investment figure excludes spending in the financial sector.

In 2007, China’s total foreign direct investment rose 13.8 percent to $82.7 billion despite curbs meant to cool a boom in spending on real estate and other assets.

Beijing worries that runaway spending in industries, such as auto manufacturing, with an excess of factories and other assets could ignite a debt crisis if unneeded projects fail.

But Chinese leaders are still trying to attract investment to high-technology projects in industries such as telecommunications and computer chip manufacturing.