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Maggie Zhang

Mainland China was the world’s second-biggest outbound direct investor last year, trailing only the United States, according to ­official data released on Thursday.
The mainland became a net capital exporter for the first time in 2015 as outbound direct investment rose for the 13th year in a row to US$145.67 billion, ­outstripping foreign direct investment on US$135.6 billion, ­commerce ministry official Zhang Xiangchen said in Beijing.
The United States was first in ODI with US$300 billion last year, and Japan third with US$128.7 billion.
The private sector led the way for mainland China, contributing 65.3 per cent of the offshore ­investment, as private firms such as Wanda Group, HNA Group and Huawei Technologies shopped abroad.
‘Beware of devaluing the yuan’: economists warn China lowering currency to boost exports would harm overseas investments
Beijing has long urged its state firms to invest overseas but the push is increasingly led by an army of private investors keen to diversify their assets against a ­depreciating yuan and a slowing domestic economy.
The country’s swelling money base is also driving the outflow of funds – the broad money ­supply on the mainland at the end of ­August amounted to nearly US$20 trillion, almost twice the size of the country’s gross domestic product.

Haitong Securities chief economist Li Xunlei said he expected the offshore drive by the mainland’s private sector to continue and possibly push the country past the USby 2020.
“Private capital is actively investing overseas while domestic investment opportunities are scarce and the local currency keeps falling,” Li said. “If not for capital control measures, ODI could be even greater.”
Private capital is actively investing overseas while domestic investment opportunities are scarce and the local currency keeps falling
Haitong Securities chief economist Li Xunlei
Beijing has introduced stricter capital controls since a surge in capital outflows at the end of 2015 and early this year.
The country’s global shopping spree, from mineral resources to brands and technology, has raised concerns among governments and homebuyers alike offshore, but the desire for purchases abroad is likely to continue as ­investors take advantage of a ­defended yuan exchange rate.
China smashes annual outbound investment record, racking up US$111b in overseas investments in five months
Ha Jiming, vice-chairman of Goldman Sachs Private Wealth Management for China, said at a forum earlier this year that Beijing had to slow money supply or let the yuan depreciate.
He said it was unsustainable to continue printing money aggressively as well as defend the ­exchange rate.
A source at a state-owned enterprise that made three overseas investment deals in the first half of this year said businesses could increasingly hedge against a weaker yuan by investing overseas.
“Remaining in the home market means seeing yuan-denominated assets devalue,” the source said.
The source said he had also had more inquiries from the ­foreign exchange regulator to check the authenticity of the firm’s projects as the watchdog was concerned about the possibility of fake schemes being used as vehicles for the capital exodus.
“Even if investment projects are genuine, I expect forex regulators might still put pressure on us if the yuan is under huge devaluation pressure,” he said.


Private sector leads China’s offshore investment drive

China’s private sector led the way in outbound direct investment, contributing 65.3 per cent of the total last year. Photo: EPA

‘Beware of devaluing the yuan’: economists warn China lowering currency to boost exports would harm overseas investments

Experts say devaluing the yuan would do little for China’s economy. Photo: Reuters

China smashes annual outbound investment record, racking up US$111b in overseas investments in five months 

Ren Jianxin (R) Chairman of China National Chemical Corp makes a speech during Swiss agrochemicals maker Syngenta's annual news conference in Basel, Switzerland February 3, 2016. China's state-owned ChemChina will make an agreed $43 billion bid for Swiss seeds and pesticides group Syngenta, the companies said on Wednesday, marking the largest ever overseas acquisition by a Chinese firm. In background (L - 2ndR ) are Syngenta President Michel Demare, CEO John Ramsay and Chief Operating Officer Jonathan Parr. REUTERS/Arnd Wiegmann

Samson Lambert Lo, Managing Director & Head of Mergers & Acquisitions, Asia, Corporate Client Solutions of UBS; briefs medias on China overseas M&A trends and prospects, at Two IFC in Central. 16MAY16 SCMP/ Dickson Lee

State-owned China National Chemical Corp. on February 3 offered US$43 billion for Swiss pesticide and seed giant Syngenta, in what would be by far the biggest-ever overseas acquisition by a Chinese firm. Photo: AFP

Private sector leads China’s offshore investment drive

Mainland China ranked second in the world in outbound direct investment