China’s outbound investment slumps 46pc in first half amid tighter regulations and global uncertainty

China’s non-financial overseas investment nearly halved in the first six months of 2017 due to tighter capital restrictions and rising global uncertainty.

Non-financial outbound direct investment fell 45.8 per cent year on year to US$48.19 billion in the first half, China’s Ministry of Commerce said on Thursday. In June alone, outbound investment dropped 11.3 per cent from a year earlier to US$13.6 billion.

At the end of 2016 Beijing introduced tighter controls over funds moving out of the country and increased scrutiny of domestic companies’ foreign investments. Last month banking regulators said they were examining bank loans taken out by the country’s top deal-making companies including Anbang Insurance, Fosun, HNA and Dalian Wanda.

“Unreasonable outbound investments have been effectively curbed,” Gao Feng, a commerce ministry spokesman, said during a press conference in Beijing on Thursday. He noted that Chinese foreign investment in industries like property, hotels, cinemas and entertainment have dropped 82.5 per cent year on year.

In particular, investment in overseas property fell 82.1 per cent year on year in the first half, accounting for just 2 per cent of total outbound investment during the period.

Separately, data from merger and acquisition deals also confirmed the downward trend.