China exceeded the United States to become the world's largest recipient of foreign direct investment (FDI) in the first six months of 2012, according to a report released by the United Nations Conference on Trade and Development (UNCTAD) on October 23.

China's leapfrog over the United States is mainly due to the 39.2-percent fall in FDI flows to the United States, compared to a 3-percent decline in China, said Zhan Xiaoning, Director of UNCTAD Division on Investment and Enterprise.

Zhan said China was once the world's top destination for FDI back in 2003.

In the first half of 2012, China attracted $59.1 billion in FDI while the United States attracted $57.4 billion, according to the latest Global Investment Trends Monitor.

UNCTAD projects the FDI flows will, at best, level-off in 2012 at slightly below $1.6 trillion, according to the report.

Zhan said the slow and bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory policy changes continue to reinforce the wait-and-see attitude of many transnational companies toward investment abroad