China attracted USD 29.91 billion  in foreign direct investment (FDI) in the first quarter of 2013, up only 1.44 percent year on year, the Ministry of Commerce (MOC) revealed on April 18.

In March alone, the FDI growth also eased to 5.65 percent to reach USD 12.42 billion, compared with a growth of 6.32 percent in February, when China reported a recovery in FDI after declining for eight consecutive months since June 2012.

The Ministry stated during the January-March period, most of the FDI flocked to China's service and manufacturing sectors, which attracted 48.24 percent and 44.05 percent of the country's total FDI, respectively.

Foreign investors set up fewer new firms in manufacturing and service sectors in the first three months, but such sectors still managed to post FDI growth, according to MOC.

While the Chinese economy saw weak recovery in the first three months, some positive reforms and changes aiming at medium- and long-term growth are under way in the Chinese economy, which is helpful to attract overseas funds eyeing long-term opportunities.

However, a sharp increase in FDI is not likely, as in the short run, China's economic growth pace will be limited while increasing competition from funds in the United States will divert part of global funds to the world's largest economy.

The European Union remained China's primary source of foreign funds, making USD2.05 billion of direct investment in the first quarter, up 45 percent, according to MOC data.

Japanese investment in China rose 10.48 percent year on year to reach USD2.29 billion, while U.S. investment gained 18.5 percent to USD1.06 billion.

China's western regions enjoyed strong growth in foreign investment, with an increase of 18.29 percent, compared with 0.69 percent for the central regions and 0.17 percent for the east.