According to the figures released by the Chinese Ministry of Commerce last week, the US investment in China hit $1.29 billion from January to May, dropping 24 percent year-on-year.

This has prompted some to worry that China has lost its allure as the world’s favorite investment destination.

In fact, the declining US investment in China is just part of a bigger picture of US capital parked outside the US flowing back home to address a possible capital shortage on the eve of the end of quantitative easing policy.

Ben Bernanke, the US Federal Reserve chairman, has reaffirmed recently that the US will stop its quantitative easing policy after it came to an end this month.

That means the U.S. capital market will see the level of liquidity ebb from its record high. In anticipation of a money shortage, the US money, which used to be invested in overseas markets, has begun to flow back home.

To conclude, the US money leaves China not because China has lost its luster as a prime investment destination. It is because the US needs money to solve its own economic problems.

Yao Jian, the spokesman for the Ministry of Commerce, has said: “Since the US is the origin and the major part of the world’s financial crisis, its economy is recovering slowly.”

And US multinational companies need time and money to deal with their own problems before they have resources to invest overseas, he said.

Another proof of the glamor of the Chinese market is that investment from the European Union in China, however, rose by 9.02 percent year-on-year to $2.93 billion from January to May. The Asia-Pacific region registered a growth of 29.3 percent to $41.24 billion.

Hong Kong remains the largest source of overseas capital. The investment from Hong Kong to the Chinese mainland jumped 33.8 percent year-on-year to $31.4 billion from January to May.

The author is an independent analyst in Shanghai.