Yuan is luring Chinese investment

Foreign investment in China grew 38.3% in February from a year earlier thanks to a stronger yuan and large projects, the Commerce Ministry has said.

February's $6.9bn (£3.4bn) figure was well behind January, when it more than doubled to $11.2bn. In January and February, investment grew by 75.2%.

The yuan has been allowed to appreciate 3% against the US dollar since January, which has attracted funds to China.

Also, firms have moved to China to cut costs and tap into growing demand.

Foreign companies are now looking at China as less of a base for low-cost manufacturing, and more as an opportunity to sell goods to a population with rising disposable incomes.

Commerce Minister Chen Deming put the jump in investment down to the yuan strengthening and an increase in large projects.

Analysts said that further gains in the currency would tempt greater foreign investment.

"The expectation of further yuan appreciation could hasten the money flows in," said Wang Tao at Bank of America in Beijing.

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