China's foreign direct investment declined further, continuing the weakness seen in the second half of last year, as the economic rebound at the end of 2012 was not enough to boost confidence of foreign firms.

FDI dropped 7.3 percent in January from a year ago, data published by the Ministry of Commerce showed Wednesday. The economy attracted $9.27 billion of foreign investment, down from $11.7 billion in December.

Non-financial direct investment overseas climbed 12.3 percent to $4.91 billion in January.

China's economic reports over the first two months are usually distorted by the timing of the Lunar New Year holiday.

Moody's Investors Service said in a report on Wednesday that China's economy is recovering and a hard landing is becoming more and more an unlikely and distant possibility.

According to Moody's estimate, real GDP growth should climb in the upper half of the 7.5 percent to 8.5 percent range in 2013. This favorable growth outlook is underpinned by policy easing and credit extension, particularly by the non-banking sectors.

In the whole of 2012, the economy grew 7.8 percent, which was the weakest pace in 13 years. As a result, FDI decreased 3.7 percent last year.

Suggesting that the recovery is gaining momentum in January, the Purchasing Managers' survey showed that private sector activity including manufacturing and services expanded further, with output rising for five consecutive months.

RTTNews