FOREIGN direct investment in Shanghai rose 10.4 percent from a year earlier to US$1.45 billion in March, a three-month high by value due to more investment in the city's service sector, the Shanghai Statistics Bureau said yesterday.

Last month, 343 foreign-invested projects were sealed, a surge of 69 percent from a year earlier. The service sector garnered 322 projects, accounting for nearly 90 percent of the overall foreign investment in March, official data showed.

Chen Xianjin, deputy director at the Shanghai Commission of Commerce, said earlier that Shanghai remains a magnet for foreign investment.

"When the global economy is not good, investors seek after quality projects to guarantee and maximize the returns of their money," Chen said.

Jeffrey Wang, vice president of the Shanghai Foreign Investment Development Board, cited Shanghai's stable economic growth, its friendly attitude toward foreign investment and a well-regulated business environment as a draw for foreign capital.

Earlier this month, the governors of California and Wisconsin states in the US were in Shanghai to announce the establishment of their state representative office to promote bilateral trade and investment exchanges.

Shanghai's economy, which grew 7.5 percent in 2012, produced more than 4 percent of China's overall economic output.

Shanghai's Producer Price Index, the factory-gate gauge of inflation, fell 1.7 percent last month, down 0.4 percentage point from that in February. The dip indicated dwindling inflationary pressure, the statistics bureau said yesterday.

China's FDI rose for the second month in March by 5.6 percent, due to more funds from Europe and the US, the Ministry of Commerce said last Friday.