Date
26 February 2020
China remained the second largest recipient of FDI globally, but the nation's direct investments overseas have fallen. Photo  Reuters
China remained the second largest recipient of FDI globally, but the nation's direct investments overseas have fallen. Photo Reuters

China 2019 FDI up 5.8%, outbound investment slumps

Foreign direct investment (FDI) in China was up 5.8 percent last year to 941.5 billion yuan (US$136.71 billion), the nation’s commerce ministry said on Tuesday.

It marked the biggest rise since 2017, when FDI grew 7.9 percent in yuan terms, Reuters reports.

China remained the second largest recipient of FDI globally, Vice Commerce Minister Qian Keming was quoted as saying at a news briefing in Beijing.

Meanwhile, the nation’s outbound direct investment (ODI) declined 8.2 percent to US$110.6 billion in 2019, said Qian.

The structure of ODI is more “balanced” with most flows to rental and commercial services, manufacturing, distribution and retail, he said.

China’s non-financial ODI rose just 0.3 percent in 2018 having dropped sharply in 2017 as authorities kept a tight grip on outflows for what they termed “irrational” overseas projects.

Qian said US$15 billion of investment, accounting for 13.6 percent of the total, flowed to countries that are along the so-called Belt and Road, China’s ambitious plan to build a modern version of the Silk Road to link China with Asia, Europe and beyond through large-scale infrastructure projects.

Investment by Chinese firms was once a significant driver of global asset prices from property to mergers and acquisitions. But it has fallen sharply since Beijing tightened capital controls in 2016, Reuters noted.

In yuan terms, China’s total ODI declined 6 percent to 807.95 billion yuan in 2019.

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