Foreign direct investment (FDI) used in China topped 63 billion U.S. dollars last year, up 4.47 percent over the previous year - but only if the financial sector is excluded from the calculation.

"It halted the downward trend in the first half of the year," said the Commerce Minister Bo Xilai at a national conference in Beijing.

A total of 41,473 new foreign-funded companies were set up in China last year, a drop of 5.75 percent from 2005, said the report.

But if the financial sector - defined as banking, insurance and securities - had been included, the FDI used in China stood at 69.47 billion U.S. dollars last year, a fall of 4.06 percent from 2005.

Including the financial sector, there were 41,485 new foreign-funded companies established in China last year, a drop of 5.76 percent from the previous year.

The exact contractual value of foreign funds, an indication of future spending plans, were not available at press time.

Bo said China would make effective use of foreign funds and make the service sector a key area to attract foreign investment.

Although China has been the largest recipient of foreign investment among all developing nations for 15 years, there is much to be done to improve both of its quality and quantity, Vice Premier Wu Yi has said.

China is to channel more foreign investment into research and development centers, new high-tech industries, advanced manufacturing, and the energy conservation and environmentally friendly sectors.

At the same time, investment that helps upgrade China's agriculture and traditionally manufacture is also encouraged.

While receiving large amounts of FDI, Chinese companies have been actively investing overseas, said Bo.

The overseas investment of Chinese multinationals totaled 16.1 billion U.S. dollars last year, up 32 percent year-on-year.

Source: Xinhua