Updated: 2005-08-16
SHANGHAI, China - Foreign direct investment in China fell 3.4 percent to $33.1 billion in the first seven months of this year compared with the same period last year, the Ministry of Commerce reported Monday.

However, pledged foreign direct investment in January-July rose 19.2 percent from a year earlier, to $98.6 billion, the ministry said.

After years of rapid growth, increase in foreign investment in China has moderated, prompting a debate over whether the slowdown might hurt economic growth given the country's heavy reliance on investment from abroad to build up its export-oriented industries.

But promised investment remains strong, and with the economy growing at a rate of more than 9 percent for the past two years, the issue has drawn little attention.

China attracted $60.6 billion in foreign investment in 2004, up 13 percent from 2003, second only to the United States. The top sources of foreign investment were Hong Kong, Japan, South Korea, the United States, Taiwan, Singapore and Germany.

Also on Monday, the government reported that China's industrial output rose 16.1 percent in July from the same month in 2004 to 581.1 billion yuan ($72 billion). The growth rate was slower than June's 16.8 percent rise.

The fastest growth was in heavy industrial and energy-related sectors. Output of automobiles rose 27.8 percent; output of crude iron grew 30.7 percent; crude steel output rose 28.6 percent; and rolled steel output was up 28 percent, the National Bureau of Statistics said.

Meanwhile, the government has launched a campaign urging the public to conserve resources, warning that waste and inefficiency could squander the country's strong growth potential.

All levels of government, companies and the public should "voluntarily practice frugality," the official Xinhua News Agency cited Vice Premier Zeng Peiyan as saying.

"The government should step up legislation to promote resources conservation, and encourage the development of related technologies," he said.

Waste of water, oil and electricity were a key problem, Zeng said.

"We are at the stage of economic development where we do not have the luxury to be wasteful," Zeng was quoted as saying.