Foreign investment in China up 17.4 per cent in 2010

Announcing the year-on-year figure, commerce ministry spokesman Yao Jian told a regular briefing that China attracted $14.03 billion in foreign direct investment (FDI) last month, up 15.6 per cent from a year earlier.

"The improvement in the investment environment has become a new driving force of China's FDI," Yao told reporters.

A combination of blistering growth in the world's second largest economy and expectations for a stronger currency have attracted a growing number of foreign investors to China in the hope of getting a better return on their money.

The data were released ahead of key figures due later this week that are expected to show the Chinese economy expanded by a red-hot 10 per cent in 2010.

Beijing, alarmed by soaring food and property prices, has been trying to reduce the volume of money flowing into the economy as inflation continues to soar - in November, it rose at the fastest pace in two years.

FDI had slowed sharply in August, rising just 1.4 per cent year-on-year compared with 29.2 per cent in July and 39.6 per cent in June.

But in September it picked up again, increasing 6.1 per cent year-on-year, while in October it rose 7.9 per cent and then leapt 38.17 per cent in November.

The data include investment by overseas companies in industries such as manufacturing, real estate, services and agriculture but exclude money put into banks and other financial institutions.

China's investment abroad in non-financial sectors rose 36.3 per cent on year to $59 billion in 2010 as it pumped more money into overseas energy, mining and agricultural projects.

Overseas investment through mergers and acquisitions totalled $23.8 billion, accounting for 40.3 per cent of the total.

At the end of 2010, the country's accumulated overseas investment in non-financial sectors stood at $258.8 billion, Yao said.