Foreign direct investment (FDI) in China will continue to grow at a steady pace in the next few months, despite the slow growth of 1.4 percent in August from a year earlier, the Ministry of Commerce said Wednesday.

The services sector continued to record a faster growth than most of the other sectors in August, and the ministry expressed confidence that the trend will be sustained as the government is committed to opening up the sector to fulfill its World Trade Organization commitments.

The ministry said China's FDI by value gained 1.38 percent year-on-year to US$7.6 billion in August, the 13th consecutive month for growth. But it is the lowest this year except for February, when the FDI growth was 1.1 percent, and compares to 29.2 percent growth in July.

"This (August) is an isolated case, and will not impact the growth momentum for the whole year," said Yao Jian, spokesperson of the ministry.

"The figures show the confidence of foreign businesses and the improved investment environment," he said.

Significantly it was in August last year that the FDI started its upward march after the global financial crisis. Experts said the high reference point is probably part of the reason why the growth is lower in the same period this year.

"It (August's small growth) is not a problem. The government is confident of further improvement in the overall investment environment and double-digit growth for the full year is certainly on the cards," said Wang Zhile, director of the research center on transnational corporations under the Ministry of Commerce.

During the past few days, several senior government officials including Premier Wen Jiabao and Vice-President Xi Jinping have reaffirmed their commitment to create a more open environment for foreign businesses in China.

World Bank President Robert Zoellick told China Daily in an interview that "China has been extremely smart and successful in saying we would be open to others' ideas, and the nation is also confident that it can take ideas and learn from others".

"China's competitiveness in labor and its huge market consumption capacity makes it an irreplaceable destination for foreign investment. China has all the credentials to be given the top billing for FDI receipts worldwide," said Yao.

Commerce Minister Chen Deming said last week that China's FDI this year will reach US$100 billion, up from $90 billion in 2009. He also predicted that China will see a new wave of foreign investment in the next two to three years, especially in the high-tech, energy and service sectors.

China's outbound direct investment (ODI) in non-financial sectors for August was around US$5.25 billion, the second highest this year after July's levels of US$8.91 billion.

Between January to August, ODI in non-financial areas was US$31.98 billion, with Asia, Latin America and Oceania being the top beneficiaries.

"China will intensify its efforts to support and encourage investment overseas," said Yao.

The ministry said last week that China is now the fifth largest investor globally, compared with the 12th position in 2008. The nation is expected to make investments of around $60 billion this year.

The ministry said on Wednesday that foreign investment in the service sector surged by 30.56 percent year-on-year in August to $3.43 billion, 29.18 percentage points higher than the average during the same period.

During the first eight months, China's FDI grew by 18.06 percent year-on-year to $65.96 billion, while for the services sector, the numbers were 36.75 percent and US$29.74 billion respectively.

(China Daily September 16, 2010)