Foreign direct investment in China falls 17.8 pct

Foreign direct investment in China fell in May for the eighth straight month as the global economic crisis battered trade and corporate finance, the Commerce Ministry said Monday. Foreign direct investment in May totaled $6.4 billion, down 17.8 percent from the same month last year, while the number of new approved foreign companies reached 1,649, down 32 percent year-on-year, ministry spokesman Yao Jian said at a news conference. That compared with a 22.5 percent year-on-year decline in April. It was the first time since the 1998 Asian financial crisis that three top investment indicators -- actual foreign direct investment, contractual foreign investment and new approved foreign companies -- all declined, Yao said. Yao said the scrapping of Aluminum Corp of China's $19.5 billion tie-up with Anglo-Australian miner Rio Tinto PLC won't affect China's policy of attracting foreign investment. "This case won't have any negative impact on foreign companies investing in China," he said. "There will be no reason for us to take inappropriate actions." Under the failed deal, Chinalco would have invested $12.3 billion in joint investments in aluminum, copper and ore mining with Rio Tinto, and spent $7.2 billion on convertible bonds in the company. China is a top destination for investment but companies have canceled or postponed spending on factories and other assets due to weakening trade and the global financial turmoil. Foreign direct investment last year rose 23.6 percent from 2007 to $92.4 billion, though growth began to weaken toward the end of the year. source：www.businessweek.com