In 2008, China’s total FDI dropped by 2.6%, despite an upturn in the last few months and a year-on-year increase of 103% in December. This was the first time investment had fallen since 2005. China’s positive investment growth from August through December resulted in part from the low numbers in the latter half of 2008. Nonetheless, the country met its economic targets for the year, and proved quite resistant to the downturn. Total investment attracted in 2009 reached US $90 billion.

GDP rose by 8.7% in 2009, surpassing the target set by the government of 8%. Industrial added value, fixed asset investment, and retail sales all grew from 2008, while CPI and foreign trade fell. All of these areas, however, saw improvement in the last quarter of 2009. In particular, China’s export market grew in December by 17.7% after 13 months of decline. December’s increase in FDI was also accompanied by a surge in ‘hot money’ entering the market. Given the government’s concerns regarding currency and real estate speculation, it should be anticipated that further scrutiny of capital inflows will continue, with the possibility of delays in accessing funds after capital injections into local entities.

These numbers reflect China’s (and the world’s) recovery from the economic crisis. As other economies pick up, investors are returning to pre-recession trends in the Chinese market. The return to positive growth is hopefully the start of ongoing growth in FDI, exports, and domestic sales. According to the World Bank, the global economy should grow by 2.7%, but this recovery may slow as the impact of financial stimuli decreases.