Non-financial ODI is trending downwards
April 24, 2017 Category Foreign investment, Weekly
China’s non-financial outbound direct investment (ODI) slumped 30.1% in March from a year earlier as authorities kept a tight grip on capital outflows to help support the yuan and safeguard the country’s foreign exchange reserves. Non-financial ODI totaled USD7.11 billion last month, according to the Ministry of Commerce (MOFCOM). For the first three months of this year, non-financial ODI tumbled 48.8% to USD20.54 billion from the same period last year. Outbound investment in countries involved in China’s “One Belt, One Road” infrastructure initiative was USD2.95 billion in the first quarter, or 14.4% of the total. Non-financial ODI tumbled 52.8% in January-February from the same period last year, with amounts in the property and entertainment sectors down more than 80%. Many Chinese firms are unable to close deals because they cannot secure official permission to transfer yuan into foreign exchange. While Beijing says it supports legitimate overseas investment, regulators have warned they would pay close attention to “irrational” investments in property, entertainment, sports and other sectors, China’s non-financial outbound investments rose from USD5.5 billion in 2004 to a new high of USD170.11 billion in 2016, according to the National Bureau of Statistics (NBS). This figure is expected to continue growing in the coming years despite the country’s recent capital controls, consultancy EY said. Earlier data showed foreign direct investment (FDI) into China rose 1% to CNY226.51 billion in the first quarter from a year earlier, the South China Morning Post reports.
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