05/15/2009, 00.00
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Foreign investments in China plummet by 22.5% in April

The biggest drop is in South Korean and US investments, but also from Hong Kong. Cars and medicines buck the trend. The collapse in investments causes the closure of new factories and an increase in unemployment.
Beijing (AsiaNews/Agencies) – The downward spiral of foreign investments in China has worsened, plummeting 22.5% in April compared to the same month last year.

They “only” dropped by 9.5% in March. In the first 4 months of 2008 there was a comprehensive decrease of 21%. Analysts observe that the April data is unreliable because in April 2008 there was a record in foreign investment.  They reveal that China is still an attractive market, especially because there are 1.3 billion consumers and that add that foreign investment in 2008 amounted to   92.4 billion dollars, 23.6% more than 2007.  But the prolonged decline in foreign investment, over the past 7 months, is the first since the Asian financial crises in the late ‘90’s.

Above this has been caused by a drop in funding from the United States and South Korea as well as Hong Kong even if the latter is still the biggest source of investment equal to 45%.  Instead the auto and pharmaceutical industries are experiencing growth, because of growing internal demand.

This drop in investments has led to the closure of thousands of factories every month, with an increase in unemployment.  Since October in Guangdong alone tens of thousands of factories have been closet.

This decline has also affected the specialised jobs market: foreign companies in the past absorbed many diplomats and Chinese graduates, who had chosen their studies with this in mind and now find themselves with no alternative.

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