BEIJING (Reuters) - Foreign direct investment (FDI) in China rose the most in more than two years in September, likely boosted by strong growth in the country’s manufacturing and hi-tech sectors, the commerce ministry said on Friday.
FDI rose 17.3 percent to 70.63 billion yuan ($10.73 billion) in September from a year earlier, compared with a 9.1 percent gain in August, marking its biggest percentage gain since August 2015.
For the first nine months of the year, FDI rose 1.6 percent from the same period to 618.57 billion yuan, the ministry said in a statement on its website.
FDI in China’s manufacturing sector rose 7.5 percent in January-September, accounting for nearly 30 percent of the total foreign investment in the period.
Chemical and medical products manufacturing saw robust increases of 48.6 percent and 40.6 percent, respectively.
Foreign investors’ interest in China’s high-tech manufacturing and services sectors also remained strong, the ministry said, with FDI in those areas rising 27.5 percent and 24 percent in the first nine months.
Profits at China’s industrial companies rose the most in four years in August, driven by higher prices, particularly in sectors such as oil, steel and electronics, and solid demand at home and abroad.
A sustained improvement in foreign investment would offer further support to the yuan currency, which has staged a dramatic turnaround this year after a sharp fall in 2016.
The yuan has rebounded thanks to a reversal in the surging dollar and a further widening of Beijing’s forex controls, including a clampdown on some overseas acquisitions by Chinese firms which some suspected were really being used to channel money offshore.
That has staunched heavy capital outflows, which had been seen as one of the biggest risks to China at the start of the year.
It also has helped boost confidence in the world’s second-largest economy ahead of a key Communist Party meeting this month at which President Xi Jinping is expected to consolidate his grip on power.
The yuan had gained 5.6 percent against the dollar so far this year, but authorities have allowed it to backtrack a bit in recent weeks, possibly due to concerns that its rapid run-up would start to hurt China’s exports.
Reporting by Beijing Monitoring Desk and Yawen Chen; Editing by Kim Coghill