Jake van der Kamp observes in today's SCMP that what foreigners promise to invest in China isn't necessarily what they actually put in...and what they do put in loses money hand over fist. Chart below the jump.

the impression some people may get that foreign direct investment (FDI) inflows to the mainland are rising. The story dealt exclusively with private equity inflows and these do indeed appear to be up. They also constitute only a very small proportion of total FDI inflows and the larger picture suggests that foreign investors are increasingly less ready to follow up their money talk with money itself.

The first chart tells you the story. The red line shows the amount of FDI contracted over the last 10 years and the blue line the amount of FDI actually utilised. The two were about the same in 1999 but in 2005 the utilised was less than a third of the contracted FDI and, in fact, slightly down from 2004. Relative to the size of the mainland economy, utilised FDI is barely half of what it was 10 years ago.

Look also at the green line. Private equity inflows more than doubled in 2005 but still amounted to barely 5 per cent of utilised FDI, leave alone what they were relative to contracted FDI.

And why may foreign investors now be showing greater reservations about backing up their investment promises with investment capital?

I find one clue tantalising. A data series in mainland statistics aggregates the losses of loss-making enterprises. The second chart shows you this data on an annual basis for foreign-invested enterprises including Taiwan, Hong Kong and Macau ones.

Ouch indeed. These losses have doubled in the last two years.