China's outbound investment nearly halved in the first half from a year ago amid efforts to contain irrational investment, the Ministry of Commerce said yesterday.
Non-financial outbound direct investment in the first half fell 42.9 percent year on year to 331.1 billion yuan ( billion) as irrational outbound investment had been effectively controlled, Qian Keming, vice minister of commerce, told a briefing yesterday.
Government measures, including tighter verification on the authenticity and compliance of overseas investment projects, were introduced late last year to prevent illegal capital flow overseas disguised as investment.
Last year, ODI surged 58.7 percent in the first half and 44.1 percent for the whole year.
"Companies are more focused on investment into the real economy," Qian said.
"ODI into offshore manufacturing industries fell less than that into the real estate, cultural, sports and entertainment sectors."
He said the country supported normal overseas investment activities as a number of merger and acquisition deals, some of them large, were carried out smoothly.
"We encourage authentic deals that are compliant to domestic rules and laws, international practices, and market principles," Qian said. "We especially encourage projects along the Belt and Road initiative."
Investment in countries along the Belt and Road initiative edged down only 3.6 percent.
In addition, revenue from China's foreign engineering contracts rose 7.2 percent to 462.2 billion yuan.
Qian said improving domestic economic stability and greater international uncertainties had also dampened enthusiasm for overseas investment.
Official figures showed that China's second-quarter GDP rose a better-than-expected 6.9 percent year on year, the same pace as in the first quarter.
A series of data, including trade, retail sales and credit expansion, pointed to lasting recovery in the world's second-largest economy.
International organizations, including the International Monetary Fund, JPMorgan, Nomura Securities, Asia Development Bank and Standard Chartered Bank, raised their forecasts for China's economic growth for the year by between 0.1 to 0.2 percentage points.
Long Guoqiang, deputy director of the State Council's development research center, told the briefing that China will remain an important source of overseas investment.
Volatility of outbound investment data is usual for any country due to the occurrence of mega deals. Chinese companies will continue to make overseas investments and integrate global resources as a natural outcome as they enter a more advanced stage of development, Long said.