BEIJING - Foreign direct investment (FDI) in China looks like it's heading toward a new record and could exceed $106 billion this year, a senior Ministry of Commerce official said, underscoring global investors' confidence in the world's second-largest economy.

From January to June, the nation's FDI surged by 18.4 percent year-on-year to $60.9 billion, according to the commerce ministry.

"So far this year, the growth momentum of China's FDI has been strong. If it can be maintained, China's FDI will reach a new high point, surpassing last year's level," said Yu Jianhua, assistant to the commerce minister, at a news conference on Wednesday about the 15th China International Fair for Investment and Trade in Beijing.

In 2010, FDI in China reached a high of $105.7 billion, up 17.4 percent year-on-year.

Despite the increase for the first half, monthly year-on-year growth is declining. In March, China's FDI growth stood at 32.9 percent, however, the figure weakened to 2.83 percent in June, data from the ministry show.

But the fluctuation does not necessarily mean multinationals are losing confidence and holding back on investing in the Chinese market.

The yearly World Investment Report released on Tuesday by the United Nations Conference on Trade and Development said that China will remain the most attractive investment destination in the next two years.

According to the report, China absorbed the second-largest volume of FDI in 2010, following the United States, and for the 19th consecutive year was the largest developing economy in terms of FDI and the second-largest worldwide.

"China will maintain its commitment to its strategy of opening the market to the world and effectively utilizing foreign investment," Yu said.

Many measures will be taken to do so in the long term.

"China will open the market wider, especially the service sector, simplifying procedures, such as granting local governments authority to approve FDI proposals, and strengthening its efforts in fighting the infringement of intellectual property rights," Yu said.

In 2010, China's service sector absorbed 46.1 percent of the total FDI that year, and the western part of the country outperformed the rest in FDI growth.

He Manqing, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the ministry, said she is upbeat about the FDI prospects for this year, citing the nation's fast economic growth.

"FDI growth this year is expected to be around 15 percent," she added.

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