FOREIGN direct investment in China rose for the second straight month in March, boosted by increased funds from the European Union and the United States, the Ministry of Commerce said yesterday.

But concerns have emerged whether the investment rally will continue because of uncertainties in China's economic recovery.

Foreign investors pumped US$12.4 billion in China last month, up 5.65 percent from a year earlier, the ministry said. The increase slowed from 6.32 percent in February but was still higher than the drop of 7.3 percent in January.

Shen Danyang, a ministry spokesman, said China's inbound foreign investment has stabilized in the past two months because of the country's economic recovery.

China attracted US$29.9 billion foreign investment in the first quarter, up 1.44 percent year on year.

During the quarter, investment inflows from the 27-member EU surged 45 percent to US$2.1 billion, while US firms invested 18.5 percent more to US$1.1 billion.

But an analyst worried about whether the FDI growth can be kept.

"China's economy slowed in the first quarter, which may discourage foreign investment in the short term," said Li Maoyu, an economists at Changjiang Securities Co.

China's gross domestic product grew 7.7 percent from a year earlier in the first quarter, down from 7.9 percent in the final three months of last year and missed market hopes for a rebound of at least 8 percent.

The World Bank recently lowered its projection of China's growth this year to 8.3 percent from 8.4 percent previously, citing risks in the property sector, the financial system and local government liabilities.

Last year, China attracted US$111.7 billion in FDI, just shy of the record of US$116 billion in 2011 and marked the first annual fall in three years.

In the January-March quarter, China's outbound direct investment surged 44 percent to US$23.8 billion as Chinese companies globalized. They invested in Southeast Asia, the EU, the US, Australia, Russia and Japan, the ministry said.