China Jan-July ODI Plunges; FDI Drops Slightly

     BEIJING (MNI) - China's non-financial outbound direct investment (ODI)

plunged 44.3% y/y to $57.2 billion in the first seven months of the year, the

Ministry of Commerce said on Tuesday, ascribing the drop to a curb in

"irrational investments."

     The decline was slightly smaller than the 45.8% y/y decrease in ODI in

dollar terms recorded in the first six months of the year.

     The "One Belt, One Road" initiative continued to drive China's ODI in the

January-July period, with a total of $7.65 billion in new investments in the 50

countries along the route from China to Europe, representing 13.4% of total ODI,

MOFCOM said.

     Investments mainly went toward the manufacturing; leasing and commercial

services; and information delivery, software and technology sectors. Investment

in the manufacturing sector increased 18.4% y/y, while investment in the leasing

and commercial services sector rose 28.7% y/y.

     Meanwhile, investment in real estate dropped 81.2% and decreased 79.1% in

the cultural, sporting and entertainment sector.

     Foreign direct investment (FDI) into China also fell in the first seven

months. Actual FDI was down 1.2% on an annual basis to CNY485.42 billion,

excluding investment in the financial sector, compared with a 0.1% decline from

January to June, MOFCOM said.

     MOFCOM said FDI in the high-technology service sector was up 16.8%

year-on-year to CNY70.31 billion in the January-July period, while FDI in the

high-technology manufacturing sector totaled CNY37.39 billion, increasing 8.3%

y/y, MOFCOM noted.

     FDI in the oil processing, coking and nuclear fuel processing sector jumped

328.4% y/y, the ministry said.

     FDI from Hong Kong, Taiwan and the Europe Union rose 6.6%, 41.2% and 5.4%,

respectively.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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