The slower rate of increase in inbound foreign direct investment into China has led to fears that the country is no longer attractive to global capital and that the deceleration marks the start of an entrenched trend.

If the gloomy prospects for the global economy are taken into consideration, though, it is highly likely that this downturn in FDI only reflects world conditions and does not result from changes in China's economic fundamentals.

Admittedly, China is faced with greater competition in its attempts to attract global capital, that being the result of increasing production costs and the policies that other countries, such as the US and Republic of Korea, have adopted to woo capital.