But analysts cautioned about reading too much into economic
indicators for January alone, given the strong seasonal distortions
caused by the timing of the Lunar New Year holidays, which began on
Jan. 31 last year but start on Feb. 19 this year.
January FDI rose 4.5 percent from December, the Commerce Ministry
said on Monday. In terms of value, January FDI was the highest since
June 2014.
Earlier data showed FDI in China rose just 1.7 percent in 2014, the
slackest pace since 2012. The weak performance underscored a cooling
economy which is spurring more Chinese firms to plow money into
assets overseas in a trend that is soon set to overtake inbound
investment.
Foreign direct investment is an important gauge of the health of the
world economy and is also a good indicator of where capital is
flowing within the country.
Shen Danyang, the ministry's spokesman, told reporters that China's
foreign direct investment will be stable for 2015, but it was too
early to predict whether China will continue to be the world leader
in attracting FDI this year.
![](http://archives.lincolndailynews.com/2015/Feb/16/images/ads/current/stacy_sda_121014.png) China overtook the United States to become the top destination for
FDI in 2014, largely due to falling inflows caused by a deal between
U.S. firm Verizon Communications Inc <VZ.N> and its British partner
Vodafone <VOD.L>, according to the United Nations economic
think-tank UNCTAD.
"We are fully confident that China's FDI will be among the highest
in the world (this year)," Shen said.
But he conceded that China's foreign trade still faces many
uncertainties as the global economic recovery remains fragile.
He added that while the world's second-largest economy should pay
attention to deflationary risks, China has not sunk into a
deflationary cycle.
In January, the top 10 investors, led by Hong Kong, South Korea,
Singapore, Taiwan and Japan, made up for 96.5 percent of China's
FDI, the ministry said.
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In line with China's manufacturing slowdown, the data showed
investors were flocking to the services industry, which has remained
relatively buoyant.
Foreign direct investment in the services sector hit $9.2 billion in
January, up 45.1 percent from a year earlier and accounting for 66
percent of total FDI.
China's outbound direct investment (ODI) hit $10.2 billion in
January, up 40.6 percent from a year earlier, the ministry said.
Last year, China drew a record $119.6 billion worth of FDI, while
ODI surged 14.1 percent to a new high of $102.9 billion.
The government has been encouraging Chinese firms to invest abroad
to help them become more competitive internationally, utilize their
surplus capacity, and help slow down the rapid build-up of foreign
exchange reserves.
(Reporting by Jenny Su and Kevin Yao; Editing by Kim Coghill)
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