Foreign direct investments into China grew 11.6 percent year on year in the first three months of this year, led by a flow of funds to tap the nation's lower labor costs, huge consumer market and continued growth.

The country received US$15.9 billion of FDI from January to March, the Ministry of Commerce reported yesterday.

The ministry approved 9,297 foreign-invested firms in the first quarter, a rise of 4.36 percent from the same period last year.

"The strong FDI inflow suggests the investment mood remains high after the nation curbed foreign capital into sectors which consume high levels of energy and resources and pose a threat to the environment," said Li Mingliang, an analyst with Haitong Securities.

"China's fast growing economy which creates an expanding consumer market is a major attraction, and the nation remains a production destination given its cheaper costs of labor," he added.

Two years ago, China steered foreign investment into the service sector and manufacturing with higher added-value to optimize its industry mix, industry officials said.

A stricter approval process hampered some planned manufacturing projects and caused a slight fall in FDI in 2005 and a small growth of 4.06 percent last year.

The situation recovered this year fueled by strong economic expansion and analysts expect the stable growth to continue for the rest of the year.