China attracted a record $52.7bn (�32.9bn) in foreign direct investment in 2002, but investment growth has slowed down from the previous year.

Investment in the world's most populous country slowed to 12.5%, from 14.9% in 2001, after tailing off at the end of the year, the ministry of foreign trade said.

The Chinese government has made it easier for foreign companies to expand in China and entry into the World Trade Organisation (WTO) in 2001 has resulted in liberalisation in some industries.

The cheap labour market, which demands wages less than 5% of those in the US, also helped attracted foreign manufacturers.

Economic boom

Contracted foreign investment, an indicator of future investment, rose 19.6% in 2002, outpacing the previous year's 10.4% gain.

The capital influx has fuelled a strong growth in the manufacturing sector, helping China's economic growth reach 8% last year.

A United Nations report has indicated China will become the top recipient of foreign director investment (FDI), overtaking the US.

The state media reported that China expected to attract about $100bn in FDI a year between 2006 to 2010.