According to an article in the Shanghai Daily today, Foreign Direct Investment into China slowed drastically to a year on year rise of...38.3%! [1] You know times are good when slowing down to 38% growth represents a drastic reduction. Of course, when your main barometer shows inflation charging ahead at 7 - 9%, then you probably need that much growth in investment just to stay ahead.
What really struck me about this article however was the following...
"New foreign-funded firms fell 38.02 percent to 1,454, as investors focused on bigger and more capital-intensive projects, said Li Maoyu, an analyst at the Changjiang Securities." [1]
As a sign of the times, this plainly means that the central government is much more interested in encouraging larger scale projects that not only will help the macroeconomics of China, but also are more easily controlled by the central authorities. Furthermore, it is a sign of the continued changing demographics of China as urbanization continues to steamroll ahead and China's tier-2 and tier-3 cities consolidate and attract millions of migrants.
[1] Wang Yanlin, Shanghai Daily, March 13, 2008, (c) Shanghai Daily Information Company
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