BEIJING: China saw its foreign direct investment (FDI) for July increased by 29% from the previous year to US$6.92 billion (RM21.69 billion), making it the fourth consecutive month that China has experienced an FDI increase of more than 20%, according to news portal Chinadaily.com.

July's gain extended China's monthly FDI increase to 12 consecutive months.

Quoting the Ministry of Commerce, the portal reported that the figure was also the second-highest monthly growth this year and showed the confidence of foreign businesses operating in China, despite recent suggestions about a challenging investment climate.

The report added that China surpassed Japan as the world's second largest economy in the second quarter as Japan's nominal gross domestic product from April to June reached US$1.29 trillion, compared with China's US$1.34 trillion.

Economists believed China is "highly likely" to surpass Japan in terms of gross development product this year.

“China's domestic consumption has also been expanding rapidly. During the first seven months, retail sales of consumer goods increased by 18.2% year-on-year to US$1.25 trillion, according to the National Bureau of Statistics,” it noted.

The Ministry of Commerce said China's FDI increased by 20.7% to US$58.35 billion during the first seven months. The top investing nations include Singapore, Japan, South Korea, the United States and Germany.

From January to July, the growth of FDI in the service sector outshined other sectors, at 37.6% versus 4.58% for the manufacturing sector. Western China and the northeast registered FDI growth of 19% and 63%, respectively.