China FDI Slowing

The pace of foreign direct investment in China has been slowing in the last couple of months, down 5.49% in July from the previous month. This may not be a big concern, at least not just yet, given that China continues to attract billions of dollars in such foreign investment projects, $32.7 billion in the last seven months, according to China Daily. A slowdown in FDI may even be welcome, as the Chinese authorities have been trying to slow down the seemingly runaway train of economic growth (with all the associated problems, both near term and long term, of growth that outpaces the capacity of the nation's, and perhaps global, resources to provide sufficient fuel or carrying capacity). Nevertheless, we should keep our eyes on this. The housing bubble in China is also being deflated, with lots of help from the authorities (and not just the People's Bank of China). If growth slows too fast or too much, it could bode ill for the global economy, including the United States. Stay tuned.