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China's FDI up 0.29 pct in May, further growth expected

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BEIJING, June 18 (Xinhua) -- China's actual use of foreign capital in May stood at 9.26 billion U.S. dollars, up 0.29 percent year on year, the Ministry of Commerce (MOC) announced Tuesday.

This marked the fourth consecutive monthly increase since February, when China reported an FDI recovery after seeing monthly declines since June 2012.

During the first five months, inbound investment increased 1.03 percent from a year earlier to 47.6 billion U.S. dollars, MOC data showed.

"We expect FDI to grow steadily this year," MOC spokesman Shen Danyang said at a press conference.

From January to May, China approved the establishment of 8,609 foreign-invested enterprises, down 7.04 percent from a year earlier.

The service sector saw a steady increase of FDI inflows in the first five months, up 4.03 percent year on year and accounting for 48.31 percent of the total FDI inflows during the period.

Foreign investment in the manufacturing sector fell 1.39 percent, taking a 43.87-percent share of the FDI inflows, Shen said.

In breakdown, direct investment from the European Union and the United States jumped 24.13 percent and 22.62 percent, respectively, to 3.45 billion U.S. dollars and 1.58 billion U.S. dollars in the first five months.

Regionally, China's western regions saw strong growth in foreign investment with an increase of 22.54 percent, compared with a 8.19-percent gain for central regions and 1.29-percent drop for the east.

Compared to other countries and regions, China's economy has maintained momentum for sustained and rapid development and its investment environment is improving, said Li Huiyong, chief economist at Shenyin & Wanguo Securities.

He said simplified management for foreign investment will help boost FDI.

Under a guideline put into effect by the State Administration of Foreign Exchange (SAFE) last month, management procedures for the payment of capital with foreign exchange by foreign investors will be simplified.

Meanwhile, the compliance of foreign direct investment in China will be tightly examined and verified to ferret out abnormal or suspicious investment.

By launching an information system for capital accounts in May, the SAFE is expected to tighten its monitoring over the movement of direct investment.

Meanwhile, Chinese investment in overseas non-financial sectors rose 20 percent year on year to 34.3 billion U.S. dollars in the first five months.

The country's outbound investment maintained fast growth and covered a wide range of industries, while the investment structure has become more optimized, Shen said.

MOC data showed that nearly 90 percent of Chinese outbound investment went to the commercial service, retail and wholesale, construction, manufacturing and mining sectors.

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