Posted by: Bruce Einhorn on January 15, 2010
I’ve been quick to say I told you so when I’ve been right about predictions, so I should be just as fast to say I goofed. News today about foreign investment in China shows just how wrong I was last year when I wrote that China’s arrest of Rio Tinto employees would spook would-be investors. Last July, in the midst of acrimonious negotiations over iron ore prices between Chinese companies and the Anglo-Australian resource giant, four Rio workers were detained on suspicion of stealing state secrets. At the time, I wrote on the Eye on Asia blog about the chilling effect this could have on foreign investment in China. “It’s hard enough for companies to negotiate deals in China without having to worry about whether their workers are going to find themselves in jail if some Chinese officials decide they don’t like the way the talks are going,” I wrote.
Apparently, not too many companies are that concerned after all. According to this story by my Bloomberg News colleagues, foreign direct investment in China has been booming. FDI in December more than doubled, to $12.1 billion. Investment for the year as a whole was down 2.6%, to $90 billion, but given how the financial crisis hammered investment early in 2009 that’s a pretty strong performance for China.