Nation's ODI falls but B&R deals increase

Updated 2018-04-12 11:09:07

China's overall outbound investment fell in 2017 as the investment structure continued to optimize, a report from global consulting firm EY showed on Wednesday.

In 2017, China's outbound direct investment (ODI) fell 32 percent year-on-year to 4 billion, according to the report EY sent to the Global Times on Wednesday.

The decline reflected many factors including the rise of international trade protectionism and a complex global investment environment, the report showed.

The fall in ODI took place as China's investment structure improved.

Loletta Chow, global leader of EY's China overseas investment network, said that China's outbound investment has moved into a "steady adjustment stage" from a rapid growth phase in 2017, with the investment structure tilting toward the real economy.

Alex Zhu, EY's transaction advisory services leader in northern China, said that China's mergers and acquisitions (M&As) in the real economy, such as transportation, rose in 2017 despite an overall decline in the number of outbound M&As.

For example, the value of overseas M&As in the automotive and transportation sectors hit .1 billion, up more than five times on a yearly basis.

Chow also stressed that China's investment into the countries and regions along the routes of the Belt and Road (B&R) initiative increased despite the overall drop in total ODI.

Data provided by China's Ministry of Commerce in January showed that Chinese companies made 62 M&As in countries and regions along the B&R routes in 2017 with .8 billion, up 32.5 percent on a yearly basis.

According to the report, the B&R investment progressed smoothly while China's M&As in the Association of Southeast Asian Nations (ASEAN) countries reached a new high, which is expected to lead the way in B&R investment. In 2017, the deal value of Chinese M&As in ASEAN surged to .1 billion, up 268 percent.

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