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China's FDI inflow falls for second month

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EIJING, Aug. 16 (Xinhua) -- Foreign direct investment (FDI) into China fell for the second consecutive month in July as global economic woes continued to weigh heavily.

The FDI the country drew last month dropped 8.7 percent from a year earlier to 7.58 billion U.S. dollars, the Ministry of Commerce said Thursday.

This brought the total FDI inflow for the first seven months of the year to 66.67 billion U.S. dollars, down 3.6 percent year on year, the ministry's spokesman Shen Danyang said.

Investment from the debt-plagued European Union dropped 2.7 percent year on year to 3.97 billion U.S. dollars in the January-July period, Shen said.

In the first half of the year, investment from the EU, China's largest trade partner, edged up 1 percent from a year ago.

In the first seven months, China attracted 1.96 billion U.S. dollars in FDI from the United States, up 1 percent year on year, he said.

Shen said the dwindling investment inflows were the combined result of both international and domestic economic factors, including the eurozone's ongoing debt crisis, the United States' strategy of bringing manufacturing back home, China's strained land supplies and rising labor costs.

China approved the establishment of 13,677 foreign-funded companies in the first seven months, down 12.3 percent from a year earlier.

Shen noted FDI into the real estate sector was effectively controlled, falling 9.3 percent in the January-July period compared with a year ago.

China has been striving to curb speculation in the real estate market in an effort to bring soaring home prices back to reasonable levels.

Premier Wen Jiabao has said the country will stick to its property tightening measures despite slowing economic growth.

The FDI data came after an array of other economic indicators for July were released, including the inflation rate, bank lending, exports and industrial output, which signaled mounting downward pressure on the national economy.

China's economy expanded at its lowest pace in more than three years in the second quarter, rising 7.6 percent from a year earlier.

The country's equity market declined Thursday, with the key Shanghai index down 0.32 percent to end at 2,112.20.

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