China financial outbound direct investment surges 26 percent in 2015

BEIJING (Reuters) - Outbound direct investment (ODI) by China’s financial institutions rose 26 percent in 2015 to $24.4 billion, government data showed on Thursday.

Outstanding ODI hit $165 billion at the end of 2015, up 30 percent 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 ODI, 90 percent was invested in overseas financial institutions with the rest going into non-financial firms, according to the report.

No other details were given, but big Chinese insurers, including Ping An Insurance Group Co of China 601318.SS and Anbang Insurance Group, have been aggressive in making overseas investment in recent years.

China’s overall ODI, which includes non-financial ODI, rose 18.3 percent in 2015 - the 13th consecutive year of growth - to a record high of $145.67 billion, the report said.

The overall ODI, which accounted for 9.9 percent 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” program.

The ODI surpassed foreign direct investment (FDI) in China, which totaled $135.6 billion last year, making the country a net exporter of capital, Zhang Xiangchen,an official from the commerce ministry, told a news conference.

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

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

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

Reporting by Yawen Chen and Kevin Yao; Editing by Kim Coghill