(Updates with value of investment in second paragraph, outbound investment in final paragraph.)
Nov. 16 (Bloomberg) -- Foreign direct investment in China grew at a faster pace in October, signaling corporate spending is holding up amid the global financial turmoil.
Investment rose 8.8 percent from a year earlier to $8.33 billion, the Ministry of Commerce said in a statement in Beijing. The gain was 7.9 percent in September. Inflows in the first 10 months of the year increased 15.9 percent, the ministry said.
China is set to report record foreign investment for the second year as companies tap rising incomes in the world’s second-biggest economy. Stronger spending by businesses in the Asia-Pacific region may help counter a slowdown in funding from Europe and the U.S. where concerns about the euro zone’s deepening debt crisis have roiled markets and investor confidence.
“China’s strong growth is attractive enough to bring in more investment but the amount of inflows may slow given the financial turbulence,” Dariusz Kowalczyk, a senior economist at Credit Agricole CIB in Hong Kong, said before today’s release.
China will expand 8.6 percent next year compared with 1.8 percent for the U.S. and 0.3 percent for the euro area, according to estimates the Organization for Economic Cooperation and Development released on Oct. 31. The nation can sustain annual growth of 8 percent, Fan Gang, a former adviser to China’s central bank, said on Nov. 12.
The nation’s expansion is attracting companies including Caterpillar Inc. The world’s largest maker of construction and mining equipment, said on Nov. 10 it would offer as much as HK$6.89 billion ($885 million) to buy ERA Mining Machinery Ltd. a company that designs, manufactures, and sells underground coal-mining equipment in China.
October’s investment brings the total for the first 10 months of the year to $95 billion. FDI last year was $105.7 billion, according to ministry data.
Investment from the U.S. in the first 10 months of this year dropped 18.1 percent while that from Japan surged 65.5 percent, the ministry said today.
A poll of 320 chief executive officers in 26 countries across the Asia-Pacific region found that 44 percent planned to make their largest investment in China in the next three to five years, according to a report published Nov. 3 by PricewaterhouseCoopers.
China’s outbound non-financial investment rose 14.1 percent in the first 10 months from a year earlier to $46.3 billion, the ministry said.
--Zheng Lifei. Editors: Nerys Avery, Ken McCallum
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