Foreign direct investment in China fell 8.7 percent in July,the government said, as the economy continues to feel the pinch of slowingglobal growth and the European debt crisis.
Overseas companies invested $7.58 billion in factories andother projects in China last month, the commerce ministry announced. For thefirst seven months of the year, FDI fell 3.6 percent on year to $66.67 billion.
The July result represents the worst fall since December andcontinues a downward trend that goes back to November, with the exception ofMay, when it eked out a marginal gain of 0.05 percent.
"The slowdown in world economic growth, increasinguncertainties and a lack of proper solution to the European debt crisis"were external factors contributing to the decline, said ministry spokesman ShenDanyang.
He also cited volatility in global financial markets as wellas the US government's call for boosting the country's manufacturing sector andencouraging investment domestically as causes for the decline.
Also, emerging economies such as India, Brazil and Russiawere "becoming new hot spots for multinational companies", he said.
Within China, tight land supply, rising labour costs andstill suppressed domestic demand have impaired the Asian giant's appeal toforeign investors, Shen said.
But the country will remain competitive "in the longrun" thanks to the government's stimulus efforts to boost growth, a stablepolitical outlook and improving legal system, he added.
Growth in China, the world's second-largest economy, hasslowed for six consecutive quarters and expanded 7.6 percent in the threemonths ended June 30, its worst performance in three years.
The government said last week that exports and imports bothdecreased in July as the country's trade conditions deteriorated.
Shen said: "We expect foreign trade in the second halfof the year will face a more severe environment."
Still, Premier Wen Jiabao has expressed confidence thatChina will be able to meet its targets for this year, including growth of atleast 7.5 percent, the official Xinhua news agency reported Wednesday.
"We have the conditions and the ability to definitelymeet this year's economic and social targets," he said.
China's economy grew 9.2 percent in 2011 and 10.4 percent in2010.
The International Monetary Fund last month forecast China'seconomy would rebound in the second half of 2012 to expand 8.0 percent annuallyas government policies to spur growth take effect.
Authorities have cut interest rates and lowered reserverequirements for banks in a bid to spur lending to help bolster the economy.Recent poor economic data have increased speculation they may carry out moreloosening steps.
