THE foreign direct investment (FDI) flowing into China in the first seven months of the year fell for the first time in 17 months compared with the same period a year earlier, as firms from Japan, Europe and the United States cut spending in the manufacturing sector.

    China attracted US$71.1 billion in FDI between January and July, down 0.4 percent from a year ago and its first decline since February 2013, the Commerce Ministry said.

    For July alone, the world’s second-biggest economy drew US$7.8 billion worth of FDI, data showed, the least in two years.

    The government did not explain the drop in FDI, which came as China’s economic growth appeared to be softening again after a hopeful bounce in June.

    It did say the drop was not due to Chinese probes into foreign firms for monopolistic behavior, such as a recent one into foreign automakers.

    FDI is an important gauge of the health of the external economy, to which China’s vast factory sector is oriented, but it is a small contributor to overall capital flows compared with exports — which were worth about US$2 trillion in 2013.

    “FDI in the services sector still grew relatively quickly, although foreign investment in the manufacturing sector fell from a year ago,” said Shen Danyang, the spokesman at the commerce ministry.

    “While we are pushing structural reforms in the economy, it is quite normal for FDI flows to fluctuate between months.”

    FDI inflows in China have maintained steady growth every year since the country joined the World Trade Organization in 2001. Inflows reached a record high of US$118 billion in 2013.

    And as China’s economy matures, more Chinese companies are looking abroad for growth.

    Nonfinancial direct outbound investment by Chinese firms rose 4 percent to US$52.6 billion in the first seven months.

    Data showed that the top 10 overseas investors in the first seven months were China’s Hong Kong and Taiwan, Singapore, South Korea, Japan, Germany, the United Kingdom, France, the Netherlands and the United States.

    Their combined investment hit US$66.8 billion, accounting for 94 percent of the total FDI.

    Investment from the United Kingdom and South Korea grew at the fastest pace in the first seven months, rising 61 percent and 32 percent respectively to US$730 million and US$2.9 billion.(SD-Agencies)