In recent years China has stepped up its crackdown on foreign capital inflows in a range of polluting sectors, such as mining and energy, while encouraging more FDI in areas such as environmental protection and hi-tech. For example, the new corporate income tax law that came into effect on January 1 has phased out the preferential tax rates that many foreign companies used to enjoy. But foreign investments in hi-tech and environmental protection are still eligible for favorable rates.

Analysts say such selectiveness will not dampen the enthusiasm of foreign capital for China and could channel it away from low-margin manufacturing to industries with higher value-added products and services. This could balance the country's investment structures and help with the sustainable growth of the Chinese economy, said Ma Xiuhong, Vice Minister of Commerce at a press conference earlier this year.

Ding Zhijie, an economics professor at the University of International Business and Trade, said in a statement that the country's labor-intensive industries could see a fall in FDI inflows, but investor enthusiasm for industries with higher value-added products and services would further pick up steam.

Chen added that China would double its efforts in improving its legal system and ensure fair and orderly market competition for companies from all over the world. The newly established Anti-monopoly Bureau under the Ministry of Commerce is part of the country's latest regulatory efforts, he said. The government also would increase the transparency and efficiency of market regulations to smooth the path for foreign investment in China, he said.