Economy > Investment

​China's ODI decreases with improved structure

Xinhua Financein CFBOND
2018-09-30 10:24

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Although China's outbound direct investment (ODI) decreased in 2017, its structure was improved, according to a report released by the Ministry of Commerce (MOFCOM) on Friday.

The report said over the last year alone, China's ODI decreased by 19.3 percent from 2016 to 158.29 billion U.S. dollars, which marked the first year-on-year decline for China's ODI on record.

Despite the decline, that figure still took third place worldwide and accounted for over 10 percent of the global ODIs for the second consecutive year.

"The Chinese government has strengthened its review over the authenticity and compliance of the ODIs made by Chinese enterprises since the end of 2016," said Zhang Xingfu, deputy director of the Department of Outward Investment and Economic Cooperation of MOFCOM. "As Chinese enterprises become more mature and rational when conducing ODIs, the growth of China's ODI slows down with an improved ODI structure."

According to the report, China's ODI spread across 18 industry segments last year, with more than 80 percent of the total amount flowing into the segments including commercial services, manufacturing, wholesale and retail, and financial services, each of which received over 10 billion U.S. dollars in investments.

During 2017, Chinese enterprises closed a total of 431 mergers and acquisitions (M&A) deals in 56 countries and regions, with the total investments in M&As reaching 119.62 billion U.S. dollars.

Meanwhile, over 800 Chinese enterprises made their overseas investments in RMB last year, with the total amount taking up around one-fifth of China's ODI in 2017.

"The rapid growth of China's ODI is not only a natural outcome of China's economic growth but also an embodiment of China's high-quality development," said Zhang. "There will be no change to the 'Go global' for Chinese enterprises."

Despite the decrease of ODI, China's total ODI stock still ranked second in the world by the end of 2017 with 1.8 trillion U.S. dollars, according to the report.
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