Actualized foreign direct investment (FDI) in China this year will probably be the same as last year at around US$60.3 billion, Xinhua learned from the Ministry of Commerce on Friday.

The preliminary statistics did not include investment in the banking, securities and insurance sectors. Last year, China saw a slight decline of 0.5 percent in its FDI.

Sources with the Ministry of Commerce said China was facing increasingly fierce international competition for foreign investment.

In the year to November, contractual foreign capital totaled US$167.46 billion, up only 0.15 percent from the same period last year, while the amount of foreign capital actually used was US$54.26 billion, up 2.14 percent.

The ministry said China would continue to be the top destination for foreign investment among developing countries, but the annual increment would stay around US$60 billion in the next five years.

Experts warned a drastic rise was unlikely because production costs in China were rising as a result of stricter requirements on environmental protection and higher salary levels.

They argued the government could take advantage of the steady growth period to channel more foreign direct investment into the higher value-added technology-intensive and service sectors.

In the year to October, foreign capital used by service industries, including real estate, information technology, distribution, tourism, and architecture, surged 14.63 percent year on year to US$10.94 billion while that by manufacturing industries declined 6.81 percent to US$34.01 billion.

(Xinhua News Agency December 23, 2006)