From January to July, overseas investment was down 1.16 percent to 32.71 billion dollars, the Ministry of Commerce said on its website.

In the first seven months of 2006, the number of companies arriving to set up business in China fell 7.63 percent to 22,772. Only 3,022 foreign companies were established in July, down 12.15 percent from a year ago.

The ministry said that the largest sources of investment came from Hong Kong, the British Virgin Islands and Japan.

In the first six months of 2006, foreign direct investment fell 0.47 percent to 28.4 billion dollars from a year earlier, while in June investment dropped off 12.23 percent to 5.44 billion dollars, according to previously released figures.