According to the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), China also approved the establishment of 9,421 foreign-funded enterprises over the same period, 21.97 percent up from the corresponding spell last year.

Analysts said the surging FDI fully demonstrates foreign investors' keen interest in the Chinese market, despite the sluggish growth of the world economy.

The rapid growth also exceeded MOFTEC's earlier prediction that the country's FDI would rise by just 5 percent this year.

Experts say the buoyant investment climate indicates that China has freed itself of the negative influences of the 1997 Southeast Asian financial crisis.

That slump dragged down China's use of FDI to a negative growth of 11.37 percent in 1999 and a modest 0.93 percent rise last year.

Between January and May, the actual FDI in China reached US$15 billion while contractual foreign investment also registered a hefty 42.29 percent rise to US$25.97 billion, according to MOFTEC.

Ma Xiuhong, assistant minister of MOFTEC, said earlier this year that although a slowdown in the world's economic growth is making investors more cautious, China's rapid economic growth in the past three consecutive years, and the country's good economic performance in the first quarter of this year, made the country a favoured target for foreign investors.

China's pending entry into the World Trade Organisazion (WTO) and the Chinese Government's commitment to WTO rules boosted foreign investors' confidence in the market.

Ma said the government would continue to try its best to attract foreign investors into the country.

In conjunction with the hefty rise in FDI, China's foreign trade also rose 13.5 percent to reach US$197.68 billion in the first five months of this year, according to the General Administration of Customs.

In May alone, China's foreign trade totalled US$39.63 billion, a 6.9 percent increase over the same period of last year.

The past five months witnessed an 11 percent increase in China's exports, which totalled US$102.5 billion -- a slowdown from last month's 13.2 percent.

Insiders attributed this slowdown to the overall decline in world market demand.

Meanwhile, China's imports from January to May reached US$95.18 billion, 16.3 percent up year on year.

Collectively-owned enterprises and private enterprises had been active in the sector, with their foreign trade rising 63.9 percent to US$12.12 billion, the customs' report said.

Foreign trade of China's State-owned enterprises (SOEs), the backbone of the national economy, increased at a lower rate of 5.4 percent to US$85.12 billion during the period.

Two-way trade of overseas-invested enterprises in China totalled US$100.45 billion.

China's exports to the United States and Japan, two of its leading trade partners, totalled US$20.32 billion and US$17.95 respectively.

Meanwhile, imports from these two major trade partners added up to US$10.1 billion and US$17.27 billion.

(China Daily 06/15/2001)