China June FDI rises for 16th straight month

BEIJING (Reuters) - China's foreign direct investment inflows rose at an annual pace of 2.2 percent in the first six months and were up only modestly for June, indicating cautious investor optimism about the world's second-largest economy.

The Commerce Ministry said on Tuesday that China attracted $63.3 billion (37 billion pounds) in foreign direct investment in the first six months. June inflows rose 0.2 percent from a year earlier to $14.4 billion, its 16th straight month of gains.

FDI is an important gauge of the health of the external economy, to which China's vast factory sector is oriented, but it is a small contributor to overall capital flows compared with exports, which were worth about $2 trillion in 2013.

FDI inflows in China have maintained steady growth every year since the country joined the World Trade Organization in 2001. Inflows reached a record high of $118 billion in 2013.

Data from the Chinese trade ministry showed FDI from Southeast Asian nations posted the biggest fall in the first six months, down 19.2 percent at $3.4 billion.

FDI from the UK registered the sharpest increase, up a hefty 76 percent to $0.7 billion.

China's outbound direct investment from non-financial firms between January and June totalled $43.3 billion, down 5 percent from a year earlier.

(Reporting by Aileen Wang and Koh Gui Qing; Editing by Jacqueline Wong)