fdi2.jpgForeign direct investment in China dropped 33% year-on-year to $7.5bn in January. That seemingly precipitous drop in foreign investors' interest in China has to be seen against the very high levels of FDI in recent years, particularly in the run-up to the Olympics.

Also, many western companies, even if they still want to invest in China, now have big problems raising funds as the risk appetite of banks has reduced, to put it mildly.

Faced with upgrading a factory in Birmingham or funding a JV in Beijing, most bank managers are going to say yes to … well, probably neither in the current climate.

China used foreign investment valued at $92.4bn last year, up 24% on 2007, according to official figures.

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