Foreign direct investment in China more than doubled in January, fueling tight monetary policies to stem an overheated economy.

Spending by overseas companies climbed 110 percent to US$11.2 billion last month, the Ministry of Commerce said yesterday on its Website.

New foreign-funded firms rose 13.4 percent to 2,918. The much slower increase in the number of companies indicates that investors last month concentrated on bigger and more capital-intensive projects. The ministry posted the figures in a one-sentence announcement.

The figures exclude the financial sector. The 2007 FDI grew 13.6 percent to US$74.8 billion. With the financial sector, it was US$82.7 billion.

"China's allure as a good investment destination with relatively cheap labor cost and huge market is the key driver of the higher FDI," said Li Huiyong, a Shenyin & Wanguo Securities Co analyst.

The central government is beefing up efforts to prevent a credit-driven overheating of the economy as the banking industry brims with liquidity.

The People's Bank of China shifted its monetary policy from moderate to tight this year to fight inflation and rein in the economy.

China reported last Friday a January trade surplus that jumped 23 percent to US$19.5 billion. And M2, the broadest measure of money supply, rose 18.9 percent in January in the biggest gain in 20 months.

The producer price index last month rose at its fastest, 6.1 percent, in more than three years.

China's consumer price index, the main gauge of inflation, is already hovering close to an 11-year high and is expected to post a record today.

The FDI figure, together with the latest surge in economic data, indicate that an easing of China's tight monetary policy - spurred by a possible United States recession - may be delayed.

Some economists have expected an easing of policy, but Li has different views.

"As a major economy, China's monetary policy is more focused on its own economic conditions rather than external conditions,'' said Li, who expects an interest-rate increase in the first quarter.