China's foreign direct investment (FDI) continued its slight decline in the first eight months this year.

China attracted US$38 billion in FDI from January to August, down 3.02 per cent from a year earlier, according to statistics published yesterday by the Ministry of Commerce on its website.

Contracted direct investment to China, which has not yet been executed but indicates future trends, stood at US$112.7 billion in the first eight months, an increase of 20.7 per cent over the same period of last year.

The ministry said the government approved 28,393 new foreign-invested ventures, down 1.03 per cent year-on-year.

In August alone, 3,741 foreign-invested enterprises were approved by the Chinese Government, with the monthly-realized FDI dropping 0.26 per cent year-on-year to US$4.9 billion. Contracted FDI reached US$14.1 billion, up 32.05 per cent on a year earlier.

However, these short-term declines are not a major new trend in FDI flows, said Lu Jinyong, an investment researcher of the University of International Business and Trade. "Actually, a decline is natural after the great increase last year," he said.

China attracted a total FDI of US$60.6 billion in 2004, up 13.32 per cent over the previous year.

Meanwhile, he said, although the 2 per cent Chinese currency revaluation is expected to have some impact on investment in China, the country still remains attractive to foreign enterprises.

China's Commerce Minister Bo Xilai predicted at the international investment fair held last week in Xiamen, East China's Fujian Province, that China would continue to be attractive for foreign investors.

The country's qualified labour resources, well-established infrastructure and mature legal system would attract more, he explained.

"Furthermore, we will carry on cooperation with foreign enterprises on a higher level," the minister said.

"We must step up to a new stage, which means cooperation projects of a larger scale and technology cooperation of a higher level."

(China Daily September 14, 2005)