May 17, 2017 / 10:50 AM / 3 years ago

China's April outbound investments slow further despite Belt and Road push

Heads of states and officials attend a summit at the Belt and Road Forum in Beijing, China, May 15, 2017. REUTERS/Thomas Peter

BEIJING (Reuters) - China’s April non-financial outbound direct investment (ODI) fell 71 percent from a year earlier as the government maintained a tight grip on funds leaving the country despite a high-profile outward push through the Belt and Road initiative.

Outbound investment in April totaled $5.82 billion, compared with $19.98 billion a year ago, according to Reuters’ calculations based on data from the Ministry of Commerce.

In the first four months of the year, ODI fell 56 percent from a year earlier to $26.36 billion, accelerating from a 48.8 percent decline in the Jan-March period, as capital controls introduced late last year slowed overseas investments by Chinese firms.

China tightened its grip on moving funds out of the country late last year as the yuan plumbed more than eight-year lows. The currency has steadied so far this year, helped by the capital curbs and a retreat in the surging U.S. dollar.

While Beijing says it supports legitimate overseas investment, regulators have warned they would pay close attention to “irrational” investment in property, entertainment, sports and other sectors.

China’s non-financial ODI in 45 countries related to the Belt and Road initiative over the first four months of 2017 was $3.98 billion, the commerce ministry said.

Belt and Road investments accounted for 15.1 percent of total ODI over January to April, up from 8.2 percent in the year-ago period, the ministry said.

The Chinese leadership has positioned its Belt and Road initiative as a new engine for global growth and development, with a focus on expanding trade and investment.

Reporting by Elias Glenn and Yifan Qiu; Editing by Jacqueline Wong

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