BEIJING—China will step up oversight of inbound foreign-direct investment and pay special attention to hot-money flows into certain sensitive sectors such as the property market, Ministry of Commerce spokesman Yao Jian said Tuesday.
The comment comes a day after China announced rules to curb such inflows by limiting property purchases by foreign individuals and companies. Chinese officials have warned that excessive global liquidity, boosted by quantitative easing measures in the U.S., has given developing countries new pressure from fund inflows.
“We will further strengthen oversight of inbound foreign investment … especially to prevent ‘hot money’ inflows in sensitive areas,” Mr. Yao told reporters after a news briefing. “In accordance with the State Council’s overall demands we need to further stabilize the property market.”
Foreign direct investment in China’s real-estate sector in the nine months ended Sept. 30 came to US$16.6 billion, up 56% from a year earlier, Mr. Yao said, far outpacing overall FDI growth of 16.6% for the same period. For January-October, FDI was up 15.71% from a year earlier to $82.003 billion, the ministry said Tuesday.
China’s government said Monday that foreign companies can purchase commercial property that they plan to use only for themselves. It also reinforced existing rules limiting residential purchases by foreign individuals to one unit, also for self-use.
Mr. Yao also said China’s rare-earth export policies next year will remain unchanged and that China hopes other countries with rare-earth resources can boost their development, adding that China is willing to work with these countries to help exploitation and production.
It isn’t sustainable for China to supply 80% to 90% of the world’s rare-earth metals when it only has 30% of the world’s reserves, Mr. Yao said. He said China’s export quota for this year was 30,300 metric tons, down 39% from last year. He didn’t disclose the quota for 2011, but said it will meet global demand for the metals.
Last week, the ministry said it began receiving applications from Chinese companies for 2011 rare-earth export quotas, but said it will cancel export certificates for companies that violated quotas or environmental protection rules, or failed to meet international standards.
The ministry said Tuesday that China attracted $7.663 billion worth of foreign direct investment in October, up 7.9% from a year earlier. In September, China attracted $8.4 billion worth of foreign direct investment, up 6.1% from a year earlier, following increases of 1.4% in August, 29.2% in July and 39.6% in June.
The scope of FDI and its growth rate for certain months this year haven’t been very large, but “the trend in inbound foreign investment is still not bad,” Mr. Yao said.
Investment abroad by non-financial Chinese institutions in January-October totaled $40.54 billion, the ministry said, without giving the year-earlier figure or a growth rate.