China boosted by Japanese inflows

"China will continue to remain a key investment area for Japan to seek new market growth points this year."

China saw strong inflows of foreign investment in January despite slower economic growth, with services and high-end manufacturing luring investor interest.

The country gained $13.92 billion in foreign direct investment last month, an increase of 29.4 percent from a year earlier. Investment from South Korea, Sweden, Singapore, Germany and another six nations and regions accounted for 96.5 percent of China's FDI in January.

The service sector accounted for two-thirds of inbound investments in January, while high-end manufacturing took up nearly all the remainder.

Domestic companies also showed growing interest in making offshore investments, with much of their attention focusing on Europe.

The ministry said it hasn't seen Japanese companies withdrawing capital or human resources from China. Only a few companies from Japan reduced their investment in China last year due to management errors and weak market demand.

"As Chinese economic growth slowed and costs in many sectors continued to rise in recent years, it is understandable that many foreign companies shut down their manufacturing facilities or carried out merger and reorganization activities in China," Zhao said.

Wei Jianguo, vice-chairman of the China Center for International Economic Exchanges, said, "That a few foreign companies leaving China is normal."

Higher costs and wages may see some manufacturing companies leave, Wei said. But the boom in China's industrial upgrading and restructuring will see its high-end manufacturing and service sectors flourish and attract more international investors.