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