China Jan-Nov ODI drops 33.5%, FDI up 9.8%

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China's non-financial outbound direct investment (ODI) from January to November fell 33.5 percent year on year as authorities curbed irrational investment overseas, data showed Thursday.

Chinese investors spent a total of 107.55 billion U.S. dollars on 5,796 enterprises from 174 countries and regions during the period, the Ministry of Commerce (MOC) said in a statement.

The decline narrowed from the 40.9-percent drop for the first 10 months this year. MOC spokesman Gao Feng was cited by the statement as saying that "irrational outbound investment has been further curbed."

China's ODI has seen rapid growth in recent years. However, noting an "irrational tendency" in outbound investment, Chinese authorities have set stricter rules and advised companies to make investment decisions more carefully since last year.

In a document released in August, the State Council said overseas investment in areas including real estate, hotels, cinemas, and entertainment would be limited, while investment in sectors such as gambling would be banned.

VCG Photo

In November, the National Development and Reform Commission, China's economic planning body, released a new draft rule on outbound investment, including stipulations on the investment activities of firms established overseas by domestic companies.

Investment in the first 11 months mainly went to leasing and commercial services, manufacturing, wholesale and retail, and information technology sectors, said the statement.

No new projects were reported in property, sports or entertainment.

Meanwhile, ODI to countries involved in the Belt and Road Initiative has been encouraged.

From January to November, China's non-financial ODI in countries involved in the Belt and Road Initiative continued to expand, totaling 12.37 billion US dollars, the MOC said.

Belt and Road deals accounted for 11.5 percent of total investments, up from 8.3 percent of all deals a year ago, it added.

Foreign director investment in Jan-Nov increases

Foreign direct investment (FDI) into the Chinese mainland rose 9.8 percent year on year to reach 803.62 billion yuan (around 122 billion US dollars) in the first 11 months.

The FDI growth was much faster than the 1.9-percent year-on-year increase registered in the first 10 months, according to data from the MOC.

The Ministry of Commerce /VCG Photo

In November alone, FDI hit 124.92 billion yuan, up 90.7 percent year on year.

The growth rate was dramatically higher compared with October, when the country's FDI rose 5 percent year on year.

FDI in the service sector posted strong growth while the manufacturing industry continued to rise.

In the first 11 months, FDI in the service sector climbed 13.5 percent year on year to 582.75 billion yuan, or 72.5 percent of the total.

Meanwhile, the manufacturing sector attracted FDI worth 207.76 billion yuan, up 0.2 percent year on year, accounting for 25.9 percent of the total FDI.

Some 60.15 billion yuan flowed into the high-tech manufacturing sector, an increase of 9.9 percent year on year.

The high-tech service industry actually used 177.1 billion yuan in FDI, more than double the amount from the same period last year.

FDI into central China registered rapid growth in the first 11 months with total volume up 29 percent year on year to 52.09 billion yuan.

Analysts attributed the fast FDI growth to the fast increase of new foreign-funded companies as well as effective policy, which has boosted the confidence of foreign investors, and capital injection for some big projects.

The number of new foreign-funded companies surged 161.5 percent to 4,641 in November, resulting in a 26.5-percent year-on-year increase in the number of new foreign-funded companies to hit 30,815 in the first 11 months, according to Gao.

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Source(s): Xinhua News Agency