CHINA's FDI inflows fell 3.45% in the first two quarter of 2012 vis a vis an year ago, extending the longest run of decline in three years as uncertainty about the global economic outlook clouds corporate spending plans.  

According to the Commerce Ministry, China drew $91.7 billion in foreign direct investment between January and October, with October-only inflows down 0.24 per cent on year ago at $8.3 billion.   Regardless of the slowing rate of inflow, China remains firmly on course to secure more than $100 billion of   FDI   for the third successive year, according to data from the United Nations Conference on Trade and Development, which collates FDI statistics globally.

FDI is an important gauge of the health of the external economy, to which China's vast factory sector is oriented, but it is a small contributor to overall capital flows compared with exports, which were worth about $1.9 trillion in 2011. The FDI figure follows a raft of other economic indicators for October, ranging from exports to factory output and investment that pointed to a recovery in the world's second-largest   economy gaining pace.  

Investment from the European Union dropped 5.0 per cent year-on-year in the Jan-October period, the data showed, while inflows from the   United States rose 5.3 per cent during the same period. Meanwhile, FDI from the top 10 Asian economies, including Hong Kong, Japan and Singapore, fell 4.7 per cent to $78.0 billion in the first 10 months.  

Services sector inflows in the first 10 months of the year were $43.7 billion, down 1.8 per cent on a year ago. Within that sector,  real estate inflows were down 6.1 per cent. Excluding real estate, services inflows were up 2.1 per cent year-on-year. Manufacturing sector inflows meanwhile stood at $40.4 billion between January and October, down 7.3 per cent versus the same period in 2011.