Beijing - Foreign direct investment (FDI) into China showed signs of faltering in December, even as overall 2008 levels showed an increase over 2007, the official Xinhua news agency reported on Thursday.

December 2008 FDI fell 5.73 per cent compared to December 2007, but rose 12.3 per cent compared to November 2008.

It was the first month-on-month increase since July, coming after a 36.5-per-cent year-on-year decline in November.

However, overall 2008 FDI jumped 23.58 per cent, or 92.4 billion dollars, according to Ministry of Commerce spokesman Yao Jian, as reported by Xinhua.

Nonetheless, that increase was a sharp drop-off from expectations earlier in the year.

The first 10 months of 2008 had shown a 35-per-cent year-on-year increase over 2007 and a 26.3-per-cent increase for the first 11 months of the year.

Yao said the service industry attracted the most investment from overseas - 38.12 billion dollars, or a 24.2-per-cent increase over the previous year.

Xinhua also reported more foreign funds flowing into China's western and central regions, instead of the heavily developed eastern region.

FDI into western China rose by 80 per cent over 2007 while central China's share rose by 36.4 per cent.

Outbound investment of Chinese companies, excluding investment in the financial sector, surged 63.6 per cent year on year in 2008 to 40.7 billion dollars, Yao said.

The Chinese government has also announced a new aid package for its car and steel industries, consisting of tax breaks for purchases of cars and farm equipment, investments in car technology and assistance for updates of technology in steel factories. (dpa)