Shanghai, China's financial and business center, used 7 billion U.S. dollars in foreign direct investment (FDI) last year, according to the municipal foreign investment working committee.

The city approved 4,061 foreign-funded projects last year, involving a little over 14.57 billion U.S. dollars, up 5.4 percent from 2005, according to the latest statistics from the committee.

It said over 9.76 billion dollars, or 67 percent of the total contractual foreign capital, went into the service sector, mainly commerce and real estate.

Like Shanghai, some other Chinese cities and provinces have reported slight increase or decline in FDI over the past few years.

Experts say China is facing increasingly fierce international competition for foreign investment as production costs in the country are rising due to stricter environmental requirements, higher salaries and more expensive land.

The Ministry of Commerce said earlier that the figure for actually-used FDI in China last year would probably be the same as 2005 at around 60.3 billion U.S. dollars after recording a 0.5 percent decline in 2005.

According to the ministry, China's contractual foreign investment totaled 167.46 billion dollars in the first 11 months of last year, up only 0.15 percent over the same period of 2005; the amount of foreign capital actually used climbed 2.14 percent year-on-year to 54.26 billion dollars.

Source: Xinhua