Despite slowing growth in the first quarter, the service sector was a rare bright spot. The sector attracted $17.39 billion of foreign investment, up 20.55 percent over the same period a year earlier.

Investment in the sector contributed 55.13 percent of the total FDI in the period. Investment in the manufacturing sector slipped 11.7 percent.

FDI registers healthy growth

China's FDI rose 16.11% in January

Analysts said the better position of the service sector dovetailed with its growing role in the economy, while China's plan to further open up domestic service industries to foreign investment could boost FDI in the sector.

The share of tertiary industry (mainly service industries) in the economy rose to 49 percent, compared with 44.9 percent for the secondary industry, according to the National Bureau of Statistics.

Meanwhile, China's outbound direct investment by non-financial firms dropped 16.5 percent to $19.9 billion in the first quarter, the Ministry of Commerce reported.

The ministry had previously said a $15 billion acquisition by oil and gas producer CNOOC in early 2013 was the reason for the sharp drop.

Analysts expect the recent decision by the National Development and Reform Commission to ease restrictions on overseas investments could spur vitality for ODI. Starting from May 8, deals less than $1 billion can proceed without official approval.

Under current regulations, outbound investment in resources has to be approved by the commission if its value exceeds $300 million while investment in the non-resources sector is subject to approval if its value exceeds $100 million.