Chinese finance firms’ overseas investments soar to US$24.4 billion last year

Outbound direct investment by China’s financial institutions rose 26 per cent last year to US$24.4 billion, government data showed on Thursday.

Outstanding outward investment hit US$165 billion at the end of 2015, up 30 per cent from a year earlier, according to a report jointly issued by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange.

Of the total financial outbound investment, 90 per cent was in overseas financial institutions with the rest going into firms outside the finance sector, according to the report.

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

No other details were given, but big Chinese insurers, including Ping An Insurance Group of China and Anbang Insurance Group, have been aggressive in making overseas investment in recent years.

China’s overall outbound investment, which includes spending outside the finance sector, rose 18.3 per cent in 2015 – the 13th consecutive year of growth – to a record high of US$145.67 billion, the report said.

The overall outbound investment, which accounted for 9.9 per cent of the world’s total, was the second largest after the United States, it said.

The Chinese government has been encouraging local firms to invest overseas under Beijing’s “One Belt, One Road” programme.

The figures surpassed foreign direct investment in China, which totalled US$135.6 billion last year, making the country a net exporter of capital, Zhang Xiangchenan official from the commerce ministry, told a news conference.

Fear of yuan depreciation driving China’s outbound investments

China’s status as the world’s second-largest economy, the largest trading nation in goods, plus its ample foreign exchange reserves – still the world’s largest – will be a “solid material foundation for Chinese firms to invest overseas”, Zhang said.

Rapid rises in outbound direct investment have, however, fanned concerns over increased pressure on China’s foreign exchange reserves and external payments.

A commerce ministry spokesman said in June that China was looking into possible risks to its foreign exchange reserves as outbound investment has eclipsed foreign investment inflows.

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