Foreign direct investment in booming China last month rose 10.72 percent from a year earlier to $4.1 billion, the Commerce Ministry said on Saturday. But analysts say it is difficult to read too much into the monthly FDI figures, which are highly volatile. China's exports have boomed in recent years thanks in part to huge investment inflows by foreign companies eager to tap into the country's cheap wages.

Exports from the world's seventh-biggest economy hit $50.8 billion in January, up 42.2 percent from a year earlier, while imports were $44.3 billion, up 24 percent.

Foreign direct investment in China rose more than 13 percent last year to almost $61 billion.

Contracts for planned foreign investment rose 27.69 percent in January from a year earlier to $12.8 billion, the Commerce Ministry said. FDI in December was $3.1 billion, down more than half from a year earlier.

China had a record haul of nearly $61 billion in foreign investment in all of 2004, compared with the $53.5 billion in 2003. Contracted FDI was $153.5 billion in 2004, up 33.4 percent on the year.

Economists expect other data for January, to be released next week, to show continued industrial strength coupled with easing consumer inflation, making it unlikely Beijing will need to raise interest rates again soon.

Worried that superheated growth in industries such as steel and property could unbalance the economy, China has adopted a series of measures since 2003 to curb credit and investment.

The steps included a tougher approval process for industrial projects, higher reserve requirements for banks, and in October the first increase in lending interest rates in nine years.

Copyright Reuters, 2005