Xinhua quoted China Ministry of Commerce said China used USD 42.78 billion of foreign direct investment in the first five months this year up by 54.97% YoY from the same period last year.

The report said the growth was lower than a YoY growth rate of 59.32% used in the January to April period this year. Meanwhile, the number of newly approved foreign funded enterprises shrank 20.95% to 11,915 in the first five months.

Mr Hao Hongmei an analyst with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce said "The quality of China's FDI use has improved as a raft of new measures was introduced to regulate foreign investment."

He said that foreign companies now tend to have more interest in investing in high tech and high value sectors which need vast financial input, than in labor-intensive and lower value industries.

Mr Hao said "China remained a favorite destination for overseas investment especially big investors like the top 500 multinationals."

Mr Chen Deming commerce minister said earlier in a press conference that the steadily-increasing FDI reflected the optimism of foreign companies about their returns from the Chinese market and their intention to accelerate investment in the country to profit from the appreciating Chinese currency.