China keeps strengthening regulatory scrutiny on ODI

World
Europe

01:29

The Chinese Ministry of Commerce has released new figures on China's outbound direct investment (ODI) in 2017, showing a drop from the year before. Meanwhile, the global ODI has decreased for the second consecutive year. To prevent risks of unhealthy ODI growth, China is continuing to strengthen regulatory scrutiny.

In 2017, China's ODI outflows reached 158 billion US dollars, down 19.3 percent compared with the previous year. This was the first drop in growth of Chinese ODI since 2003 – when the government first started reporting these numbers. However, China's 2017 figures still ranked third in the world, and they covered a wide range of activities.

Zhang Xingfu, deputy director-general of the Outward Investment Department of the Chinese Commerce Ministry, noted that in 2017, China's ODI covered 18 major categories. Investments poured into fields like commercial services, manufacturing, finance, wholesaling and retail.

Still, Chinese investments in Europe and Africa were on the rise. Investments in countries taking part in the Belt and Road Initiative rose by 30 percent. As a result, Chinese enterprises abroad helped boost tax revenue and employment in host countries.

But growth is accompanied by problems, such as investing too heavily, or with questionable legality. So the Chinese government is planning to further strengthen its oversight.

Zhang said, "In order to prevent potential systemic risk brought on by overly fast growth in outward investments, the government is strengthening oversight of compliance, to guide enterprises to make rational investments."

Officials also say the government will streamline administrative services to ensure that outward investments are healthy and stable.