International investment set to decelerate: consultancy study

Outbound direct investment from China is expected to steadily slow down, and Chinese enterprises will further strengthen their risk management capabilities to improve the quality of their investments, according to a report released Thursday by consultancy firm EY.

The nation’s outward foreign direct investment ( FDI) rose 30 percent year-on-year in 2016 to a record high of $ 188.8 billion.

Non- financial l outward FDI accounted for 87 percent of the total, reflecting their growing and leading position in China’s outbound investment, the report said.

However, the report noted, China’s going global trend is expected to slow down gradually because the global political and economic environment remains complex and unpredictable, and Chinese authorities have tightened rules on outbound invest-

ment since the end of last year.

In December, the National Development and Reform Commission, the Ministry of Commerce, the People’s Bank of China and the State Administration of Foreign Exchange jointly announced that they would supervise irrational outward direct investment in sectors such as real estate, hotels, cinemas, entertainment and sports.

Chinese companies should concentrate on enhancing the quality of investment to achieve stable development.

“Chinese enterprises can better balance the ‘ risk’ and ‘ return’ during outbound investments, through establishing a comparatively thorough risk management system … via an objective risk analysis method and an appropriate manner,” said Sunny Chow, EY’s risk advisory services leader in South China.