Chinese outbound investment grows prudent

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China’s non-financial outbound direct investment contracted by over 40% year-on-year in the first three quarters this year, as the effects of tightening capital control continues to prove effective in cooling down “irrational investment.”

The figures were released by the Ministry of Commerce on Tuesday, who said that the changed investment patterns also reflected a healthier structure pivoting towards more substantial sectors such as services, manufacturing, retail and information technology, while there were no new deals in entertainment and real estate.

Total non-financial outbound investment was 78 billion US dollars for the first nine months, a number that has slumped amidst stricter regulations over the sometimes extravagant investment activities of Chinese firms.

Han Yong, a senior official at the Ministry of Commerce./China International Contractors Association Photo.

Turnover of outsourced projects reached 102.5 billion US dollars. Han, a senior official at the ministry, believed there was reason to be optimistic about the future, as Chinese enterprises have shown stronger interest in assigning capital in Belt and Road countries under the national initiative.

61 nations in the Belt and Road program received 96.72 billion US dollars’ worth of contracts, a 30% hike from a year ago.

“Our monthly outwards investment ran from nine to 10 billion US dollars. Looking at the overall growth trajectory, by the end of the year I think the total amount will reach somewhere between 100 to 110 billion US dollars," added Han.

There were also positive results from cooperating with foreign institutions and companies. In the first three quarters, there were 508 projects that were worth more than 50 million US dollars, together resulting in 143 billion US dollars, and 85 percent of the overall size of the contracts signed.