China’s outbound investment plummets


China’s non-financial outbound direct investment (ODI) nearly halved in the first half of 2017 as curbs over capital outflows took effect, the commerce ministry says.

Outbound direct investment in the January to June period plummeted 45.8 per cent from a year earlier to $US48.19 billion ($A62.62 billion).

Rapid falls in the yuan currency prompted Beijing to tighten control over funds moving out of China since late 2016, as it moved swiftly to quash expectations of a further steep depreciation and safeguard its reserves.

Capital outflows have eased in recent months in the face of tighter regulations and the US dollar’s rally paused.

The yuan has gained more than two per cent this year.

“Unreasonable outbound investment have been effectively curbed,” the ministry said during a regular briefing in Beijing on Wednesday, noting overseas investment in real estate, hotels, cinemas and entertainment had dropped significantly.

For example, investment into overseas real estate fell 82.1 per cent from a year earlier in the first six months of the year, accounting for just two per cent of the total outbound investment during the period, data from the ministry shows.

In June alone, China’s total outbound investment dropped 11.3 per cent from a year earlier to $US13.6 billion.

China burned through nearly $US320 billion of reserves last year but the yuan still fell about 6.5 per cent against the US dollar, its biggest annual drop since 1994.



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