China attracted a record $63 billion FDI in 2006, up five per cent over the previous year, reversing a declining trend in the first half of the year.

China's commerce minister Bo Xilai in Beijing stated this, without disclosing the exact contractual value of foreign funds.

The minister said that China would make effective use of the FDI to make its service sector attractive to foreign investors.

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 its quality and quantity, he said.

China is to channel more foreign investment into research and development centres, 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 traditional products is also encouraged, Xinhua news agency reported.

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

The overseas investment of Chinese companies totalled $16.1 billion last year, up 32 per cent year-on-year, he said.