China’s Overseas Investment Expands 24% in First Quarter Despite Curbs

China’s Overseas Investment Expands 24% in First Quarter Despite Curbs

Xu Wei

Date: Tue, 04/17/2018 - 11:51 / source:Yicai
China’s Overseas Investment Expands 24% in First Quarter Despite Curbs
China’s Overseas Investment Expands 24% in First Quarter Despite Curbs

(Yicai Global) April 17 -- Despite continued restrictions on Chinese outbound investment related to the real estate, sports and entertainment sectors, China’s non-financial investment overseas climbed just over 24 percent in the first quarter of this year, official statistics show.

The headline figure rose to USD25.5 billion, the commerce ministry said in a statement posted on its website. March represented the fifth consecutive month of expansion, the ministry said, adding that the data indicates the quality of investments has improved, while irrational spending abroad has been checked.

The government first brought in restrictions on overseas investments in the real estate, sports and entertainment sectors last July, calling such deals “irrational” due to their risky nature. The move followed intensive spending sprees in recent years by major Chinese conglomerates such as HNA Group Co., which is now enduring a cashflow crisis, and Anbang Insurance Group, now under state control. Domestic firms have not made any investments in these sectors abroad since controls were introduced.

Turnover related to foreign contracted projects in the first quarter reached USD34.7 billion, an increase of 18.5 percent annually, while the total value of new contracts 3.8 percent to USD44.59 billion

New outbound investments related to China’s Belt and Road Initiative totaled USD3.6 billion in the first quarter, up 22.4 percent compared to the year-ago period, with newly signed deals in Belt and Road-participating countries reaching USD20.63 billion, accounting for close to half of the total for the quarter.

Often compared with the ancient Silk Road, the Belt and Road Initiative was proposed by Chinese President Xi Jinping in 2013. It is a grand 30- to 40-year plan for a vast infrastructure and trade route boasting a major network of railroads, highways, ports and pipelines embracing the continents of Asia, Europe and Africa.

In the first quarter, domestic firms signed 158 new deals overseas valued at more than USD50 million. The total worth of large projects came to USD37.42 billion, representing 83.9 percent of the overall value of contracts signed. 

Editor: William Clegg

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Keywords: MOFCOM, investment abroad