07/17/2012, 00.00
CHINA

Foreign investment in China down by 6.9 per cent

In June, investment of just 12 billion U.S. dollars. Growth in EU investment. Beijing thinks of easing tax on dividends. Growth in non-financial foreign investment. The choices of Nissan and Fiat.

Beijing (AsiaNews / Agencies) - The Beijing government has announced that direct foreign investment in China fell by 5.9% in a year. To attract more capital, the second largest economy is studying ways to ease taxes on dividends.

In total, foreign investment fell to 12 billion U.S. dollars in June, marking the lowest drop since last December. According to figures published today, instead the European Union investment picked up: in the first six months of 2012 it invested 3.52 billion U.S. dollars in China, with an increase of 1, 6% from last year.

To attract more investment, China plans to reduce rates on dividends for countries that have tax treaties with Beijing, the fees will be 5% instead of 10%.

The Chinese economy is experiencing its most severe slowdown of the last three years, with growth of 7.6%. Two days ago Prime Minister Wen Jiabao warned that recovery is still ongoing and that "over time things can get worse."

In return, the Department of Commerce announced today that non-financial foreign investment grew by 48% in the first half of the year. Car companies like Nissan and Fiat are focusing on China to increase their sales. China is the largest car market in the world.

 

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