The mainland's money supply surged sharply last month, suggesting a pick-up in economic activity in the coming months, according to figures from the central People's Bank of China. Separately, committed foreign investment - an indicator of investors' intentions - gained 19.6 per cent last month year on year to US$3.8 billion. However, actual investment fell 4.2 per cent, according to data from the Foreign Trade Ministry. Supporting Beijing's promise to spend its way out of the economic slowdown, broad money supply M2 rose 15.5 per cent to 9.63 trillion yuan (about HK$8.96 trillion) at the end of last month, with the growth rate up from 14 per cent in June. Xinhua news agency said the figures revealed 'positive changes' in money supply, particularly as lending by state banks rose quickly. The narrow money supply measure M1, which includes deposits and cash in circulation, rose 10.5 per cent by the end of last month, up from a growth rate of 8.7 per cent in June. 'As the narrow money supply is closely connected with industrial output, this means that the growth rate of industrial output will pick up in the coming months,' Xinhua said. Last month, industrial output rose 7.6 per cent, down from 7.9 per cent in June and 8 per cent in May. Beijing blamed the severe flooding in many parts of the country partly for the fall. The central bank said outstanding loans by the end of July rose 15.8 per cent year on year, 0.2 percentage points higher than June. Last month new lending amounted to 43.37 billion yuan, up 22.44 billion yuan in the same month last year. Of the new lending, infrastructure investment amounted to 11.49 billion yuan, 11.05 billion yuan higher than for the same month last year. In the first seven months, 72.75 billion yuan was spent on infrastructure projects, up 28.22 billion yuan on same period last year. Beijing relied on infrastructure to fuel economic growth while its other engines for expansion - exports and inflow of foreign investment - slowed. The Ministry of Foreign Trade and Economic Co-operation data showed that from January to July, contracted foreign investment rose 7.25 per cent to US$28.18 billion, with the growth rate up from 5.5 per cent in the first half of the year. In the same period, actual foreign investment was down 1.74 per cent to $23.88 billion.