China’s out­ward in­vest­ment tops $161bn in 2016

FDI into China for 2016 seen as flat in yuan terms

Kuwait Times - - BUSINESS -

China’s non-financial out­bound di­rect in­vest­ment (ODI) is likely to hit 1.12 tril­lion yuan ($161.19 bil­lion) in 2016 and for­eign di­rect in­vest­ment into China will to­tal 785 bil­lion yuan, Com­merce Min­is­ter Gao Hucheng said yes­ter­day. The gov­ern­ment will “pro­mote the healthy and or­derly de­vel­op­ment of out­bound in­vest­ment and co­op­er­a­tion” in 2017, Gao said in re­marks at a con­fer­ence that were pub­lished on the ministry’s web­site.

China’s ODI in Novem­ber jumped 76.5 per­cent from a year ear­lier and it rose 55.3 per­cent in the first 11 months of 2016, the ministry’s data showed, as lo­cal firms con­tin­ued to in­vest abroad amid a slow­ing econ­omy and weak­en­ing yuan.

Sep­a­rately, the ministry said on its mi­croblog that China will sharply re­duce re­stric­tions on for­eign in­vest­ment ac­cess in 2017, open­ing up sec­tors where for­eign com­pa­nies have strong in­vest­ment in­ter­est and risks are un­der con­trol.

No de­tails were given on what re­stric­tions will be changed. Ear­lier this month, China pub­lished draft for­eign in­vest­ment guide­lines which it said would “in­crease open­ness to the out­side world”.

Based on Gao’s fore­casts, non-financial ODI is set to sur­pass for­eign di­rect in­vest­ment into China by an un­prece­dented 335 bil­lion yuan this year, amid wor­ries about cap­i­tal out­flows. For all of 2015, the ministry re­ported non-financial ODI of 735.1 bil­lion yuan, and FDI of 781.4 bil­lion yuan.

Gao said that in 2017, dif­fi­cul­ties faced in main­tain­ing a sta­ble flow of for­eign in­vest­ment into China will in­crease, while sources of volatil­ity for China’s out­bound in­vest­ment will rise along with risks, ac­cord­ing to an in­ter­view with state me­dia pub­lished Mon­day.

Beijing has an­nounced a string of mea­sures re­cently to tighten con­trols on money mov­ing out of the coun­try, in­clud­ing closer scru­tiny of out­bound in­vest­ments, as the yuan skids and the coun­try’s for­eign ex­change re­serves fall to the low­est lev­els in nearly six years. China will fur­ther en­hance the com­pet­i­tive­ness of its for­eign trade and con­sol­i­date re­cent good mo­men­tum, Gao added. — Reuters

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