In China, FDI to service sectors—such as entertainment and media, hotels, real estate, financial service and trade—has surpassed that to manufacturing, as a result of surging flows to non-financial services and a slowdown of FDI in the manufacturing industry. FDI in China has shown a preference for the service sector, with real estate, trade and business service attracting the most FDI, according to the UNCTAD report.

"The fact that Chinese service sectors attracted more FDI than manufacturing in 2011 marks a turning point for FDI in China, and the future will see a continuingly greater flow of FDI into Chinese service sectors," said Liang.

"The policy support for FDI should be transferred from focusing on quantity to quality. We should pay more attention to hi-tech industries, headquarters of multinationals, research and development and brand management," said Liang. "Moreover, we should see the importance of the service sector's development to China's next-step economic growth. A complete policy system to facilitate FDI in the service sector should be formulated."

FDI in finance is expected to grow as the country continues to open its financial markets and as foreign banks, including HSBC (United Kingdom) and Citigroup (United States), try to expand their presence through M&As and organic growth, said Zhan.

"The Chinese Government will further implement proactive policies to encourage and expand the use of foreign investment. Moreover, the structure of FDI should be optimized and the level of utilizing FDI enhanced," said Wang. "FDI inflow will be steered into emerging new industries, modern service sector, hi-end manufacturing sector, hi-tech sector, modern agriculture and energy-saving and environmentally friendly sectors."

MOFCOM, together with other concerned departments, is formulating an industrial index for foreign investment in China's central and western regions. "We plan to offer policy support and more stimulative incentives to guide FDI to these regions," said Wang.

"In the long run, China still possesses very strong competitiveness in attracting foreign investment," said Wang. "China has a stable political, social and economic environment. It also has enormous market potential. The closer enterprises are to the market, the more successful they are likely to become."

The Chinese Government has worked full out to better the investment environment, which is a huge appeal to the world. The UNCTAD's survey shows that China is still the most favorable investment destination of multinationals, which fully demonstrates foreign investors' faith in the Chinese market.

Opening up is a national policy, and attracting foreign investment is an important part of it. "During the past three decades, we've been constantly optimizing the investment environment through efforts such as the nine-month campaign against piracy launched by the State Council, simplified approval procedures and upgraded foreign-invested industrial parks," said Wang.

"Besides, Chinese leaders have reiterated on many occasions that all legally registered foreign-invested companies in China shall be treated the same as Chinese enterprises," said Wang.

The Central Government has issued a series of policies since the beginning of this year, aiming to sustain a steady growth of FDI for 2012, added Wang.

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