China's foreign direct investment dropped for the first time in 14 months in March, the Ministry of Commerce said on Thursday morning.

Foreign investors channeled US$12.2 billion into the Chinese mainland last month, down 1.47 percent from a year earlier.

The pace compared with a 10.44 percent increase in the first two months, and was the first contraction since January 2013.

In the first quarter, China attracted US$31.5 billion in foreign investment, up 5.5 percent year on year.

The decrease was led by a 47 percent slump in investment from Japan and a 24 percent drop from the European Union. Funds from the United States dipped 1.9 percent during this period, while investment from ASEAN countries increased 7.8 percent.

Meanwhile, China's outbound direct investment fell 16.5 percent on an annual basis in the first three months to US$19.9 billion with the decrease narrowing from the 37.2 percent drop in the January-February period.

Ministry spokesman Shen Danyang said it is normal for investments, both inbound and outbound, to have some fluctuations in the face of a changing macroeconomic climate.

"The declines in March won't affect foreign investment for the year," Shen said. "We are confident of the outlook because China remains an important destination for foreign investment."

China's gross domestic product expanded 7.4 percent in the first quarter, the slowest pace in 18 months, the National Bureau of Statistics said on Wednesday.

Just hours later, the State Council said China would reduce the amount of cash some rural banks hold at the central bank to help the agricultural sector.