BEIJING, Feb. 21 (Xinhuanet) – The declining trend of China’s investment inflows extended to 2013, at an even faster pace. The Ministry of Commerce says China attracted 9.3 billion US dollars of foreign direct investment, down 7.3% year on year in January.

For more on that we are joined by our reporter Guan Xin in the studio.

Q1: Give us more details about the state of foreign direct investment from different regions.

A1: Investment from 10 Asian economies, the biggest source of China’s FDI, dropped 9 percent, and the steepest fall was from Japan, down 20% year on year. Investment from the U.S. was also down by 20 percent. But surprisingly, investment from the debt-stricken European Union rose more than 80 percent. France, Germany, Sweden and Denmark all saw their investments grow by huge margins. And in terms of where that investment is going, China’s eastern coastal regions are still the main destination for foreign investment, accounting for 85% of overall FDI into China. Still total investment in the east dropped 8.1%. Central China saw investment drop 0.8%, and western parts of the country saw foreign investments down 4.2%.

Q2: What have foreign companies said about China’s investment environment?

A2: According to the American Chamber of Commerce in China, 76% of American companies in China expected their revenues for 2012 to be up, but 9 percent lower than 2011. Their biggest concern is the risk of China seeing a slowdown in its economic growth, and the world as a whole; higher labor costs in China, and protectionism are also fears. And another survey by the EU chamber of commerce in China shows 22% of EU companies in China are considering moving their business outside of the country. Slowing growth in China’s economy and rising costs here are the major reasons. Some of them are moving their operations to cheaper places such as Southeast Asia and South America. But 63% of European enterprises are still planning to increase their investment here.

(Source: CNTV)