China’s outbound investment shows signs of life in first quarter, but analysts are wary

Outbound investment by Chinese companies picked up slightly in the first quarter, though overall momentum remains tepid amid economic headwinds and uncertainties arising from the ongoing US-China trade war.

Chinese firms and institutional investors have closed 65 outbound deals worth 168.8 billion yuan (US$25.12 billion) for the three months ending in March, reflecting a gain of 4.8 per cent from the same period a year ago, according to the Hurun China Cross-Border Merger & Acquisition Report released Wednesday.

For the whole of last year outbound investment totalled 738 billion yuan from 323 deals, reflecting a drop of 23 per cent from 2017, according to Hurun, which compiled the figures based on data from Mergermarket.

Lin Feng, founder and CEO of outbound investment service DealGlobe, said the uptick was the result of a weak comparison base last year.

“We should not read too much into single quarter data as the first quarter usually is not a busy deal making season,” he said.

Rupert Hoogewerf, chairman and chief researcher of the Hurun Report, said the data showed China’s investment outflows were returning to more normal levels.