Foreign direct investment in China grew at its slowest pace in nearly a year last month with fewer funds coming from the United States and Europe, according to Ministry of Commerce data.

However, a ministry spokesman said yesterday that China remained attractive for foreign investors because of the country's massive market potential and its improving business environment.

Investment from foreign countries edged up 2.83 percent from a year earlier to US$12.8 billion in June, the weakest growth rate since last August. It compared with May's 13.4 percent and April's 15.2 percent.

"Despite less vibrant growth momentum, the value of foreign investment in June is still the highest since the start of this year," said spokesman Yao Jian.

However, there were signs that American and European businesses had lowered their investments in China. Yao said that was related to their overall economic performance and part of their global investment cuts.

Li Maoyu, a Changjiang Securities Co analyst, said the reduction in investment from developed countries couldn't be ignored because they were still important for China's economic restructuring and technological advancement.

"Investment from developed countries not only brings in capital, but also high technology and rich management experience," Li said.

In the first six months, investors from the US channeled US$1.67 billion into China, 22.32 percent less than a year earlier. European Union countries invested a combined US$3.46 billion during the period, up 1.17 percent year on year.

Last year, out-bound foreign investment from the EU dropped 62 percent, while the US also cut its input in emerging markets, Yao said.

Between January and June, direct foreign investment in China increased 18.4 percent from a year earlier to US$60.8 billion. A total of 13,462 foreign-invested companies received permission to start business operations in the first half, up 8.77 percent year on year.

Meanwhile, China's non-financial outbound foreign direct investment gained 34 percent annually to US$23.9 billion in the year through June.

Also yesterday, Yao said the ministry was prepared to release the government's inventory of pork if prices continued to rise.

June's inflation rate, which stood at a three-year high of 6.4 percent, was driven by a 57.1 percent increase in pork costs.