Compared with the amount of overseas direct investment in January 2008, which had risen by 109.78 percent, the Ministry of Commerce said yesterday that the amount of last month in this year dropped 32.6 percent to $7.54billion.

Fewer and fewer new companies open in the international capital city, which can be shown by the figure declining 48.7% to 1496.

Analysts have the word that the recession in the developed economics and multinationals’ unwilling or short of liquidity to invest at this stage brought the problem of the economic crisis, which will last at least a few more months.

Asian economics have also suffered a lot during most of the year, they said.

Since the large quantity of investment in January 2008 and the moderation in inflows during the past few months caused the drop in FDI, said Sherman Chan, an economist with Moody’s Economy.com

You can’t expect that foreign investment could rise because the international economy is not in a good situation and overseas demand is weak, said Su Chang, a macro-economic analyst with China Economic Business Monitor.

Because of the spring festival, which is celebrated in January this year, having a full week of holidays, we cannot compare between January 2009 and 2008, since last year, it was in February.

The prominent drop is caused by financial crisis, the high comparative figure of January 2008 and the long Spring Festival holiday,” MOC spokesman Yao Jian said at a press briefing.

Yao said that the $7.54 billion capital inflow of January is a few less than the quantity of last year’s average monthly $7.7 billion. It seemed that the monthly figure is going to climb up in the last period of this year, compared to last month, because more chances will be given by the country in order to moderate its macro economy. From a long view, we firmly believe that the flow of FDI will be steady,” he said.

The overseas investment started being weak in October, but last year’s overall capital inflow still rose 23.6 percent to $92.4 billion. Among emerging economies for the 13th successive years, the figure made China the largest FDI recipient since it was higher than the 13.6 percent increase for 2007.

From the international point, FDI dropped 21% to $1.4 trillion, says a UN Conference on Trade and Development report.

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It is obvious that trade protection is certain to rise, said Mei Xinyu, a trade expert form the Ministry of Commerce. The current situation will stay for some time, he said, referring to the lasting effects caused by the US stimulus package.

The package was passed late on Friday with the proposal of distributing tens of billion of dollars into public building projects, and tends to impose conditions, for instance, only US-made steel and products can be used.

Mei also said that China could be greatly suffered from the action since it is a major manufacturing exporter that supplied enormous goods to all the other countries.

The trade barrier comes when efforts are needed to fight the devastated economic crisis in more than fifty years.

It is impossible that protectionism will do any good to anyone, said Feng Jun, a Shanghai-based WTO expert,  the package is not feasible in the age of globalization since the world today is not the same as that of the 1930.

He added that the “buy American” plan “is impossible to work”. On the contrary, it would cause trade barriers. At the same time, “short-sighted” governments will constrains foreign products and overseas investments to protect jobs and industries within the country.

Mei doesn’t agree with the move that China will not use protectionism when implementing its $586-billion stimulus package. He urged Chinese government to create an even favorable field for domestic business under the WTO framework. “We should not wait to be a victim,” he said.

It is found that the number of anti-dumping and anti-subsidy investigations into Chinese products has increased. For example, India has made an announcement that it’s 17 “trade remedy” will be made to restrict Chinese products since October 2008.

Over the weekend, Group of Seven (G7) finance ministers promised that they will not use protectionism in the process of making efforts to stimulate their domestic economies to fight the world’s most awful economic crisis.

Italian Finance Minister Giulio Tremonti, the meeting’s host, said the other ministers insisted on offending protectionism. It is a specific dangerous thing not only for economies which is heavily based on exports, he said in Rome.

US Treasury Secretary Timothy Geithner made an assurance to his competitors that the $787-billion package would not break the US’s promise of free trade.

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Recently, the director of Taipei’s “National Palace Museum” Chou Kung-Shi had visited the Forbidden City. After being impressed by the hospitality of mainland people and the rich collection in Beijing, Chou as well as her team will visit Shanghai to hold the discussion about planning the joint exhibition of virtues from the museums in Taipei and Beijing.

However, the obstacles still exist in the way of joint exhibition, such as the law of mainland which excludes a “free of capture and seizure” clause. Compared with the mainland of China, the US, France, Germany, and Austria all agreed on the “free of capture and seizure” about borrowing the virtues from Taipei “National Palace Museum” to hold the exhibitions. US is the first to do so in 1996. Under this condition, Taiwan is unwilling to lend the virtues while Taipei’s “National Palace Museum” also has extremely strict disciplines on virtues.

But the discussion about joint exhibition would deal with solving the law problem, said Chou earlier, which means no official document would be signed during her visit.

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Premier Wen hold a meeting about the preparations for the expo and ask the preparations team to get the construction of the facilities more fast and get ready of the quality service.

As the meeting means for the singe person, the Shanghai academy of Social Science researcher Qiao zhao-hong said: it is the order to get national support and worldwide intelligence to host the Expo.

The meeting also secures the right for the both side of intellectual property from the day May 1 to Oct 31 next year.

Qiao also said with the spirit of Better city, Better life will celebrate the Shanghai local construction and ideas. The shanghai City will have a better future from this chance.

One of the official from the holding team said that all the buildings are in process and the programs and activities also in the run up.

From unofficial way one of the BSWEO said every participant is willing to larger that exhibition area.

Every participant is eager to use this good chance to get more benefits form this chance.

At Feb 5, 185 countries and international organizations have been confirmed of their attendance to this meeting.

BSWECO secretary Xu Jiguo said on China News Service yesterday that the number of the attendants will be the maximum of a history record.

The EU Ambassador to China Serge said that EU will definitely attend the meeting. Different from their normal ways of concentrating on activities inside Europe by the reason of the credit of partnership with china and the ties with shanghai government.

And also all 27 EU member states have ensure the attending to the Expo.

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United States: The global crisis was brought about by the housing market collapse of this country which has earmarked $700 billion for bank funding. It is expected that Barack Obama would spend hundreds of billions of dollars more in a fiscal stimulus package once he assumes office next year.

United Kingdom: The country has carried out a 500-billion-pound rescue plan to help the banking sector. The government will make extra capital available to eight of the country’s largest banks and building societies in exchange to let them enjoy priority in shares or equity.

Germany: Has decided to allocate 500 billion euros to be liquidity or lending guarantees and 80 billion euros as state funds for bank recapitalization. The government has announced an unlimited guarantee on all retail deposits in the country’s banks.

France: Has carried out a plan to keep its financial sector stable. The liquidity and lending guarantees in this plan are up to 320 billion euros and bank recapitalization up to 40 billion euros.

Japan: Has commenced urgent steps which include to inject public funds into regional banks and to stabilize its financial market. The government is mulling measures to temporarily suspend sales of stocks held by government entities and reduce the restrictions on corporation’s purchasing of their own shares, as well as an expansion of disclosure rules on short-selling.

South Korea: Has taken a $130-billion rescue package, including sate guarantee on foreign debts and promises to recapitalize financial firms.

Australia: An urgent A$10.4-billion stimulus package has been announced to deliver cash payments to pensioners and low- and middle-income people and to offer A$1.5 billion to help people when they buy their first homes.

India: The country’s plan is taking the steps as follows: to restore the duty drawback to 11 percent; requisition to fix interest rate at 6 percent for packing credit; the repayment‘s interest of term loan can be delayed by two years; compensation to state levies and transaction cost and duty free procurement of diesel.

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Besides quoted Wen Jiabao’s earlier statement of China’s role in dealing with global financial crisis during the annual meeting of the US-China Relations National Committee in New York, Paulson also stressed the importance of closer international relationship as the financial crisis continues spreading its impact.

Paulson have stayed in close touch with Vice-Premier Wang Qishan ever since the crisis began. Mentioning his talk with Wang, he said, “Our conversations have been useful and constructive. It’s clear China accepts its responsibility as a major world economy that will work with the US and other partners to ensure global economic stability.”

According to media reports, Washington has urged Beijing to buy more US treasury debts and other financial assets to help stabilize its market. This is where the economists have cautioned China. Ha Jiming, chief economist of China International Capital Corporation, said in the Chinese Economists 50 forum that Chinese people are not as knowledgeable as the Americans in this respect, it’s too early for China to take the risk. Cao Yuanzheng, chief economist of Bank of China International Holdings, also reminded Chinese investors to be cautious when buying US Financial assets.

Although many worries from economists that crisis would hinder China from further carrying its financial reforms, Paulson said it is a great opportunity for China to learn from the mistakes of the US and could gain benefits from the potential of moving forward the reforms.

Having highlighted the China-US Strategic Economic Dialogue (SED) which was initiated by President Hu Jintao and his US counterpart George W. Bush in 2006, Paulson said: “Our recent close… communication and cooperation as we address the challenges in the financial market are a tangible example of the power and utility of an SED based on mutual trust.”

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