"The slight FDI growth in April is quite satisfactory and mainly driven by the new leadership's efforts in advancing economic restructuring," Huo said.

The State Administration of Foreign Exchange, China's foreign exchange regulator, recently scrapped 24 regulations related to the administration of capital for foreign direct investment, in line with the government's efforts in reducing red tape to increase transparency and promote investment facilitation.

However, Lu Jinyong, director of the China Research Center for FDI at the University of International Business and Economics, worried that speculative overseas money flowed into China disguised as project investments, just as it did with trade payments.

"In 2013 we will see China's FDI equal to last year with no big change," Lu added.

Rising costs at home and competition from other emerging countries were also blamed for the slowed FDI flow into China, according to Lian from the Bank of Communications.

He added that FDI in China will probably decline in the following months and maintain a slow pace of growth in the long term.

Huo said, "For China to consolidate the use of foreign capital, the government needs to speed up the reforms in investment and financing systems, including the removal of approvals and the simplification of procedures, as well as further opening up its services sector."

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