Feb. 20 – China used US$11.2 billion in foreign direct investment in January, a growth of 109.78 percent over the same period of last year, the Ministry of Commerce said Tuesday.

This is a result of strong investor confidence in China’s economic growth. In the coming months, FDI in China is expected to remain large but the growth rate should slow down a bit. Investment in China is expected to remain strong through the first half of the year, however, as the Olympics approach, many expect a slow down as investors begin to collectively hold their breath.

Sources with the Ministry of Commerce told Xinhua that China’s FDI absorption had entered a new stage, in which quality, instead of quantity, had begun to play a major role. Mergers and acquisitions perform in tandem with the establishment of new operations as the main pattern of FDI. While FDI kept growing, the number of newly established foreign-funded enterprises tended to go down.

In January, China approved the establishment of 2,918 foreign-funded companies, down 13.41 percent from the same month of last year. In comparison, the number for the whole of 2007 was 37,888, down 8.69 percent from the previous year.

Last year, China attracted US$74.77 billion in FDI, increasing 13.59 percent year-on-year and ranking first among developing nations for the 15th year in a row.