Who invented the compass?

Most scholars credit at present the invention of the compass to China. The first mention of the magnetic attraction of a needle is to be found in a Chinese work composed between 20 and 100 AD. The earliest recorded actual use of a magnetized needle for navigational purposes is in AD 1117.
The true mariner's compass used a pivoting needle in a dry box, and was invented in Europe no later than 1300

1) "In this detailed history, Aczel (God's Equation; Bentley Coll.) takes us back in time to Amalfi, Italy, where between 1295 and 1302 the compass as we know it was developed. Aczel points out, however, that the actual discovery of materials that followed magnetic lines, or at least consistently pointed in a specific direction (south), is attributed to the Chinese in 1040."
Source:
http://www.amazon.com/Riddle-Compass-Invention-Changed-World/dp/0156007533


2) "The find of an Olmec hematite artifact, fitted with a sighting mark and found in experiment as fully operational as a compass, has led the American astronomer John Carlson after radiocarbon dating to conclude that "the Olmec may have discovered and used the geomagnetic lodestone compass earlier than 1000 BC". Carlson suggests that the Olmecs may have used such devices for directional orientation of the dwellings of the living and the interments of the dead."
Source and further information:
http://en.wikipedia.org/wiki/Compass

An early form of the compass was invented in China in the 11th century. The mariner's compass was invented in Europe around 1300, which later developed into the liquid magnetic compass.

China seems to have come up with the basic design of a magnetic lodestone or needle allowed to swing freely, around 221-206 B.C., but it was first used for fortunetelling rather than as a navigational aid.

The first guy recorded using it as a navigational aid was a Chinese sailor, Zheng He (1371-1435), who made seven ocean voyages. However, prior to someone actually writing down that they were using a compass, it is believed that the Chinese were already using compasses as navigational aids as early as 850.