The “Belt and Road” Coun­tries — Im­por­tant Des­ti­na­tions for China’s Out­ward In­vest­ment

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China’s As­sim­i­la­tion of FDI

In Jan­uary-fe­bru­ary, a to­tal of 3,860 newly-es­tab­lished for­eign-in­vested en­ter­prises were ap­proved, go­ing up 13.7% year on year. The ac­tu­ally uti­lized FDI amounted to RMB 138.68 bil­lion, down 2.3% year on year. In Fe­bru­ary, 1,850 newly-es­tab­lished for­eign-in­vested en­ter­prises were ap­proved, go­ing up 33.3% year on year, and the ac­tu­ally uti­lized for­eign cap­i­tal reached RMB 58.59 bil­lion, in­creas­ing 9.2% year on year. An of­fi­cial from the Depart­ment of For­eign In­vest­ment Ad­min­is­tra­tion pointed out the char­ac­ter­is­tics of China’s as­sim­i­la­tion of FDI in Jan­uary-fe­bru­ary as fol­lows:

From the per­spec­tive of in­dus­trial dis­tri­bu­tion, the ac­tu­ally uti­lized FDI of the ser­vice in­dus­try was RMB 103.89 bil­lion, up 2.1% year on year, ac­count­ing for 74.9% of the to­tal FDI. Among th­ese, the ac­tu­ally uti­lized FDI of the pro­duc­tion and sup­ply of elec­tric­ity, fuel gas and wa­ter was up 184.4% year on year, that of traf­fic and trans­porta­tion, stor­age and mail busi­ness was up 129.8% year on year, and that of leas­ing and busi­ness ser­vice was up 64.6% year on year. The ac­tu­ally uti­lized FDI of the man­u­fac­tur­ing in­dus­try reached RMB 33.63 bil­lion, ac­count­ing for 24.3% of to­tal FDI. Among th­ese, the ac­tu­ally uti­lized FDIS of the man­u­fac­tur­ing of chem­i­cal raw ma­te­rial and chem­i­cal prod­ucts, and gen­eral-pur­pose equip­ment, com­puter and other elec­tronic equip­ment in­creased 28.3% and 37.7% year on year re­spec­tively.

From the per­spec­tive of in­vest­ment forces, in­vest­ments from ma­jor coun­tries/ re­gions re­mained steady gen­er­ally. In Jan­uary-fe­bru­ary, the ac­tual in­put of FDI from the top 10 coun­tries/re­gions (cal­cu­lated by ac­tual in­put value of for­eign cap­i­tal) reached RMB 131.27 bil­lion, ac­count­ing for 94.7% of the to­tal na­tional ac­tu­ally uti­lized FDI, up 11.3% year on year. Among th­ese, the ac­tual in­put value from Hong Kong SAR, Tai­wan and 28 EU coun­tries in­creased 22.7%, 29.9% and 13.8% re­spec­tively, year on year.

Out­ward In­vest­ment and Co­op­er­a­tion

In Jan­uary-fe­bru­ary 2017, Chi­nese do­mes­tic in­vestors car­ried out non-fi­nan­cial di­rect in­vest­ment in 1,475 out­ward en­ter­prises across 122 coun­tries and re­gions, with an ac­cu­mu­la­tive in­vest­ment of RMB 92.42 bil­lion (USD 13.43 bil­lion), down 52.8% year on year. The rev­enue of con­tracted projects overseas to­taled RMB 115.4 bil­lion (USD 16.77 bil­lion); the con­tract value of newly signed for­eign con­tract projects was RMB 172.32 bil­lion ( USD 25.04 bil­lion), up 7.4% year on year. By the end of Fe­bru­ary, there were 908,000 Chi­nese la­bor­ers overseas.

Of­fi­cials of the Depart­ment of Out­ward In­vest­ment and Eco­nomic Co­op­er­a­tion pointed out that China’s out­ward in­vest­ment and co­op­er­a­tion in Jan­uary-fe­bru­ary took on the fol­low­ing char­ac­ter­is­tics:

1. In­vest­ment to en­tity econ­omy and emerg­ing in­dus­tries main­tained con­tin­u­ous growth. In Jan­uary-fe­bru­ary, out­ward in­vest­ment mainly went to­wards the man­u­fac­tur­ing in­dus­try and the in­for­ma­tion trans­mis­sion, the soft­ware and in­for­ma­tion tech­nol­ogy ser­vice in­dus­try, up 1.6% and 44.6% year on year re­spec­tively, with the pro­por­tion in the to­tal out­ward in­vest­ment ris­ing from 13.2% and 3.9% in the same pe­riod last year to 29.7% and 12.6%. In­vest­ment went to­wards the leas­ing and com­mer­cial ser­vice in­dus­try, while real es­tate and cul­ture, sports and en­ter­tain­ment went down 74.4%, 84.9% and 91.6% re­spec­tively.

2. Coun­tries along the “Belt and Road” be­come im­por­tant des­ti­na­tions for China’s out­ward in­vest­ment. In Jan­uary-fe­bru­ary, China started in­vest­ing in 41 coun­tries along “Belt and Road” with the to­tal non-fi­nan­cial di­rect in­vest­ment reach­ing USD 1.79 bil­lion, ac­count­ing for 13.3% of the to­tal out­ward in­vest­ment, up 5.8 per­cent­age points com­pared with that in the same pe­riod last year.

3. Cap­i­tal sources of out­ward in­vest­ment of en­ter­prises be­came di­ver­si­fied. In Jan­uary-fe­bru­ary, the rein­vest­ment of overseas earn­ings of Chi­nese en­ter­prises was about USD 3 bil­lion, ac­count­ing for 22.3% of the to­tal out­ward in­vest­ment in that same pe­riod. The pro­por­tion was up 2.9 per­cent­age points com­pared with that of Jan­uary this year, and 12.3 per­cent­age points higher than that of the same pe­riod last year.

4. In­ter­na­tional ca­pac­ity co­op­er­a­tion en­joyed a fa­vor­able trend. In Jan­uary-fe­bru­ary, USD 3.01 bil­lion non-fi­nan­cial out­ward di­rect in­vest­ment went to the equip­ment man­u­fac­tur­ing in­dus­try, up 170% year on year. Con­tracted projects overseas drove the ex­port of re­lated equip­ment, reach­ing USD 2.37 bil­lion, up 32.3% year on year.

5. Con­tracted projects overseas wit­nessed a sta­ble de­vel­op­ment, and large-

scale projects were still at a high level. In Jan­uary-fe­bru­ary, there were 98 projects whose newly signed con­tract vol­ume ex­ceeded USD 50 mil­lion. The ac­cu­mu­lated amount was USD 19.39 bil­lion, ac­count­ing for 77.4% of the to­tal con­tract vol­ume of newly-signed con­tracts.

The Sta­ble Con­di­tion of the Con­sumer Mar­ket

Ac­cord­ing to data from the Na­tional Bureau of Sta­tis­tics, in the first two months of this year, the to­tal re­tail sales of so­cial con­sumer goods in China reached RMB 5.8 tril­lion, an in­crease of 9.5%. The growth rate slowed 0.7 per­cent­age points over the same pe­riod last year. From the chain, the to­tal re­tail sales of so­cial con­sumer goods in Fe­bru­ary in­creased by 0.95% over the pre­vi­ous month.

The head of MOFCOM Depart­ment Op­er­a­tion and Con­sump­tion Pro­mo­tion pointed out that the con­sumer mar­ket was fairly sta­ble in Jan­uary and Fe­bru­ary, and that con­sumer up­grad­ing con­tin­ued to show a fa­vor­able mo­men­tum, lay­ing a good foun­da­tion for the smooth in­crease of the con­sumer mar­ket of the whole year. The main fea­tures of the con­sumer mar­ket are:

Firstly, net­work sales growth con­tin­ues to lead. Ac­cord­ing to data from the Na­tional Bureau of Sta­tis­tics, from Jan­uary to Fe­bru­ary, the na­tional on­line re­tail sales of goods was RMB 649.1 bil­lion, an in­crease of 25.5%, 0.1 per­cent­age points faster than that of the same pe­riod last year, ac­count­ing for 11.1% of the to­tal value of re­tail sales of so­cial con­sumer goods, 1.6 per­cent­age points higher than that of the same pe­riod last year.

Dur­ing the Spring Fes­ti­val, the level of lo­gis­tics and dis­tri­bu­tion ser­vices has been im­proved to en­sure the smooth re­al­iza­tion of on­line re­tail growth. Ac­cord­ing to sta­tis­tics of the State Post Bureau, dur­ing the Spring Fes­ti­val and Golden Week, the na­tional ex­press de­liv­ery busi­ness al­to­gether de­liv­ered 13.75 mil­lion busi­ness items, up 20% com­pared with that of the same pe­riod last year.

Se­condly, food and bev­er­age and up­grad­ing com­mod­ity con­sump­tion grew faster. The food mar­ket is boom­ing. Be­fore and af­ter the Spring Fes­ti­val, sales of fam­ily re­union din­ners were hot. In Jan­uary-fe­bru­ary, na­tional food and bev­er­age in­come was RMB 625.1 bil­lion, an in­crease of 10.6%. The sales of up­grad­ing com­mod­ity con­sump­tion were ac­cel­er­ated. In Jan­uary-fe­bru­ary, the sales of sports and en­ter­tain­ment prod­ucts, cul­tural of­fice sup­plies, and gold and sil­ver jew­elry above des­ig­nated size in­creased by 19.5%, 13.4% and 8.2% re­spec­tively, 3.5, 3.9 and 9.7 per­cent­age points faster than that of the same pe­riod last year re­spec­tively. The sales growth of smart en­ergy-sav­ing prod­ucts such as 4G mo­bile phones and in­verter air con­di­tion­ers mon­i­tored by the Min­istry of Com­merce was 9.4% and 19% re­spec­tively.

Thirdly, car sales growth dropped. Af­fected by the tax re­duc­tion of small-dis­place­ment cars and sub­sidy poli­cies for new en­ergy ve­hi­cles, sales growth of the au­to­mo­bile mar­ket fell. In Jan­uary-fe­bru­ary, the sales of au­to­mo­bile above the norm fell 1%, pulling down the growth of the to­tal re­tail sales of so­cial con­sumer goods by 0.7% points. De­duct­ing the im­pact of cars, the growth of the to­tal re­tail sales of so­cial con­sumer goods re­mained the same when com­pared to last year.

Fourthly, con­sumer prices fell slightly. In Jan­uary-fe­bru­ary, con­sumer prices rose by 1.7% year on year, 0.3 per­cent­age points lower than that of the same pe­riod last year. The weather is warmer at the be­gin­ning of the year; which is prefer­able for the growth and cir­cu­la­tion of agri­cul­tural prod­ucts. With the ad­di­tion of a higher base last year, the prices of agri­cul­tural prod­ucts fell. Ac­cord­ing to the mon­i­tor­ing of the Min­istry of Com­merce, the prices of ed­i­ble agri­cul­tural prod­ucts in 36 large and medium-sized Chi­nese cities de­creased by 1.4% and 5.3% year on year re­spec­tively in Fe­bru­ary, among which veg­etable prices fell by 21.5% year on year, pork prices fell by 1.5%, mark­ing the first neg­a­tive growth of th­ese prod­ucts in the past 23 months.

With the re­cov­ery of the na­tional econ­omy, the en­doge­nous power con­tin­ued to en­hance and con­sumer up­grad­ing con­tin­ued to ac­cel­er­ate. It is ex­pected that the con­sumer mar­ket will con­tinue to main­tain steady and rapid growth.

With the re­cov­ery of the na­tional econ­omy, the en­doge­nous power con­tin­ued to en­hance and con­sumer up­grad­ing con­tin­ued to ac­cel­er­ate.

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