In 2017, Chinese investments in the US fell by 62.1 per cent. Beijing is worried about excessive capital outflow and rising corporate debt. The trade war with the US is an added factor. Investment in Europe is growing, but like in the US, European regulators are tightening controls in key sectors.
Beijing (AsiaNews) – For the first time since 2003, Chinese direct investment in the United States dropped by 62.1 per cent in 2017 to .43 billion, this according to a report issued by China’s Ministry of Commerce and the National Bureau of Statistics last Friday.
China’s direct investments abroad last year dropped 19.3 per cent from a year earlier to 8.29 billion, the first annual decline since data was first released in 2003.
The drop came as Chinese regulators tightened scrutiny of companies’ overseas investments amid concerns over excessive capital outflow and a buildup of corporate debt.
According to the report, last year about 80 per cent of China’s foreign direct investment targeted sectors like commercial services, manufacturing, consumer goods and finance.
Investment in overseas real estate sector declined 55 per cent in 2017, a trend that has continued this year, due to greater obstacles put up by the countries that receive investments and the tariff war that broke out between China and the United States.
With the Trump administration blocking investments, especially in technology sectors, Chinese investments have turned to Europe where Chinese direct investment surged 72.7 per cent last year to a record US$ 18.46 billion. However, Asia remains the top destination of Chinese investment despite a 15.5 per cent declined last year.
Concerned about China’s aggressive investments, European regulators have stepped up their scrutiny of such investments, especially in sensitive sectors.