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Investment growth to see momentum

Ren Xiaojin and Zhong Nan
Updated: Apr 10,2018 9:16 AM     China Daily

The growth of China’s outbound direct investment and foreign direct investment remained stable and optimistic during the first quarter of 2018, the Ministry of Commerce said on April 9.

“The country’s ODI has seen an uptick for four months in a row, and from January to February the number has increased by 25.2 percent year-on-year,” said an official from the ministry’s Department of Outward Investment and Economic Cooperation.

The ministry predicted ODI will keep growing in the first quarter, further pushing industry structure upgrading. China will release the ODI figure for the first quarter in the middle of this month.

“Eastern regions will remain active in conducting overseas investment, while the areas in western China will become new engine to power ODI,” the official said.

The investment cooperation between China and the economies involved in the Belt and Road Initiative will count for more of the country’s total overseas investment.

The infrastructure projects in those economies that need equipment, technology and services China provides will enhance bilateral and multilateral business relations, according to the ministry.

Domestic investors made $16.82 billion of nonfinancial ODI in 1,429 overseas businesses in 135 countries and regions for January-February, data from the Ministry of Commerce show.

Linklaters LLP, the international law firm, predicted that China’s outbound investment is projected to reach between $1.5 trillion and $2.5 trillion over the next decade, despite a backdrop of increasing regulatory and political concerns about foreign investment into sensitive sectors, the firm said in a report released in March.

Charles Jacobs, chairman of Linklaters, said Chinese investors need to prepare for foreign governments’ growing concerns in a number of sectors.

“We are now seeing more concern from foreign regulators relating to Chinese investment, especially those involving data and cybersecurity,” he said.

“Working with the right partners and the right deal structures is useful-but getting the timing right is vital,” said William Liu, Linklaters’ China unit head.

“Chinese businesses must be aware that regulations in the United States and the European Union are being modified and may make investment more difficult,” said Li, citing “acquiring automobile manufacturers or licensing sensitive technology.”

On the other hand, the outlook for China’s FDI also proved to be optimistic, as the Ministry of Commerce foresees a stable capital inflow in the first quarter of the year and a rising number in the newly established foreign-invested companies.

“Foreign investment will spotlight the high-tech industry,” the ministry said. “Central and western China will see a rapid growth in FDI.”