FOREIGN direct investment in China continued to grow at a slower pace in May with less money coming from the United States, the Ministry of Commerce said yesterday.

Investment from foreign countries rose 13.4 percent from a year earlier to US$9.2 billion last month, down from the pace of 15.2 percent in April and 32.9 percent in March.

Between January and May, foreign investment grew 23.4 percent year-on-year to US$48 billion.

"There are signs that investments from Asia and Europe are increasing, while American businesses lowered their investments in China," said ministry spokesman Yao Jian.

Asian countries, such as Japan, the Philippines, Thailand and Malaysia, raised their investments in China by an average of 29 percent in the first five months, while funds from European Union countries gained more than 10 percent. In contrast, the US cut their investments in China by 24.1 percent in the same period.

"Sharp falls in American investments also occurred elsewhere around the world because the US is concluding its quantitative easing policies," said Li Maoyu, an analyst at Changjiang Securities Co.

"Increasing investments from other countries demonstrate that China remains an attractive destination for foreign investment," Li said.

Foreign funds are beginning to favor industries such as agriculture, fishing and forestry in addition to the traditional choices of manufacturing and services.

The ministry's figures showed that overseas investment in manufacturing and services expanded 20.6 percent and 27.6 percent in the first five months, while agriculture, fisheries and forestry saw a jump of 28.1 percent year-on-year.

Some economists cautioned investors of uncertainties in China's business outlook. "Many investors come for a massive consumer market in China, but people's spending growth here seems to moderate in recent months," said Xue Jun, a CITIC Securities Co analyst. "Also, China's cooling economic expansion and fiercer competition may mean less of a return for foreign investors."

China's outbound foreign investment, meanwhile, received a major boost in May when Sinochem Group spent US$3 billion to acquire a 40 percent share in the Brazilian Peregrino oil field.

The deal boosted China's outbound non-financial foreign direct investment to US$20.3 billion in the first five months, up 42.3 percent from a year earlier.

That compared to a rise of 17.5 percent in the first four months.