Outbound Foreign Investment Posts 30% Leap in January

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The latest data indicates that China’s outbound foreign investment posted its third consecutive month of positive growth in January.

Figures released by China’s ministry of Commerce indicates that China’s domestic investors made non-financial direct investments in a total of 99 countries and 955 overseas companies in 2017.

The total investment amount of 69.51 billion yuan (approx. USD$10.8 billion) of January marks a year-on-year rise of 30.5%, as well as the third consecutive month of increase.

Bai Ming (白明), vice head of the international market research institution at MOFCOM, said to Shanghai Securities News that the data clearly indicated that the pace of China’s “going out” would remain unchanged, yet also pointed to the necessity of focusing on both development efficiencies and risk prevention.

According to Bai the sizeable increase in outbound foreign investment in January was primarily the result of two key factors, chief amongst them the unveiling of a series of policies by Beijing to encourage Chinese enterprises to expand overseas.

MOFCOM also released the “Guidance Opinions Concerning Further Guidance and Standardisation of the Overseas Investment Directions” (关于进一步引导和规范境外投资方向的指导意见), which clarify the specific areas where investment is encouraged, restricted or prohibited.

Bai also points out that the base figure for the same period last year was low, and that growth in foreign investment has recovered since the end of 2017.

Beijing launched a heavy-handed crackdown on overseas acquisitions in 2017 due to risk concerns and capital outflows, leading to a sizeable decline in outbound foreign investment last year.

The Chinese government appears intent on containing outbound foreign investment in areas including real estate, entertainment and fitness centres, with the recent release of a list of “sensitive” sectors that will be made subject to investment restrictions.

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