Rising foreign investment is ensuring China’s development as it mounted 22 percent to $6.6 billion in June compared to last year.
The Ministry of Commerce asserts that China’s foreign direct investment (FDI) grew 12 percent to $31.9 billion in the first half of the year. A total of 18,683 foreign-funded ventures were approved by the ministry from January to June, down 5.4 percent year-on-year.
China’s market potential and its cheap labor are attracting massive foreign currency. China, which has ensured constant growth from a decade, is converting into a hub for futuristic market.
Manufacturing, real estate and commercial service sectors are constantly attracting FDI. Analysts predict that with this pace, the FDI would exceed 60 billion U.S. dollars in 2007.
No doubt, foreign investment is a must for constant economic growth, but China should keep vigil on unnecessary boom as it could lead to inflation.
To ensure the development pace with possible check, the Chinese government has been trying to curb investment in real estate and other industries where it believes supply can exceed demand.
Despite being involved in all possible official efforts to cool the boom, Chinese economy growth is racing ahead. Inflation has increased to 3.3 percent, which automatically raises fears amongst policymakers that runaway spending could lead to debt crisis.
