Investment

by+Shen+Da

Foreign investment in China

The national overall absorption of FDI sustained its growth. In JanuaryJune， a total of 13，402 newly-established foreign-invested enterprises were approved， up 12.5% year on year. The actually utilized FDI amounted to RMB 441.76 billion （US$69.42 billion）， up 5.1% year on year （data of bank， security and insurance were not included）. In June， 2，531 newly-established foreigninvested enterprises were approved， going up 8.5% year on year， and the actually utilized foreign capital reached RMB 98.21 billion （US$15.23 billion）， increasing 9.7% year on year.

The absorption of FDI in hi-tech service sector and hi-tech manufacturing increased， with the growth of hitech service being bigger than that of hitech manufacturing. In January-June， the actually utilized FDI in service sector reached RMB 310.79 billion （US$ 48.94 billion）， up 8% year on year， taking up 70.4% of the national total. That in hitech service sector accumulated to RMB 53.74 billion （US$8.47 billion）， going up 99.7% year on year. Among these， the information technology service， data content and relevant service， R&D and the service of design stood out with an increase of 305.9%， 67.9% and34.9% respectively year on year.

The actually utilized FDI in manufacturing was RMB 124.85 billion（US$19.53 billion）， down 2.8% year on year， taking up 28.3% in the national total. Among these， that in hi-tech manufacturing reached RMB 31.47 billion（US$4.92 billion）， going up 6.2% year on year. That in medicine manufacturing and medical equipment and instrument manufacturing stood out with a growth of 107.8% and 74.9% respectively year on year.

The investment from major sources kept a steady growth. In January-June， the actual input of the investment from the top ten countries and regions （calculated by actual input value of foreign capital） amounted to RMB 417.73 billion （US$ 65.65 billion）， taking up 94.6% of the total national actual use of foreign capital， going up 5.7% year on year. Among these， those from the US， UK and Germany grew by 142.6%， 114.3% and 97.6% respectively. The growth of information transmission， computer service and software industry， scientific research， technology service and geological prospecting industry and manufacturing stood out. Over the same period of time， the actual input of foreign capital from the ASEAN countries stood at RMB 20.88 billion （US$ 3.27billion）， up 1.3% year on year. That from 28 EU countries reached RMB 35.76 billion （US$ 5.64 billion）， up 42.5% year on year. That from countries related to “Belt and Road” reached RMB 21.42 billion （US$ 3.36 billion）， down 7.7% year on year.endprint

In June， the actual input of foreign capital from the ASEAN countries stood at RMB 1.87 billion （US$ 290 million）， down 57% year on year. That from 28 EU countries reached RMB 9.74 billion （US$ 1.51 billion）， up 108.5% year on year. That from countries related to“Belt and Road” reached RMB 2 billion（US$ 310 million）， down 56.9% year on year.

The input of FDI in western China was higher and that in eastern China remained stable. In January-June， the actually utilized FDI in western China amounted to RMB 32.91 bil- lion （US$5.13 billion）， going up 29.5% year on year. The actually utilized FDI in eastern China reached RMB 385.32 billion （US$60.59 billion）， up 7% year on year. The actually utilized FDI in Middle China amounted to RMB 23.53 billion （US$ 3.7 billion）， down 32.6% year on year. The actually utilized FDI Yangtze River Economic Zone amounted to RMB 196.78 billion （US$ 30.58 billion）， up 8.3% year on year. In June， the actually utilized FDI in Yangtze River Economic Zone amounted to RMB 43.69 billion （US$ 6.67 billion）， up 27.5% year on year

There are a large number of the newly set large enterprises with added capital. In January-June， there were more than 380 large foreign invested enterprises with a total investment amount over US$ 100 million， and more than 210 enterprises added US$100 million to their capital. Among them， there were not only manufacturing enterprises that engage in R&D and manufacturing of new materials， new energy automobiles and batteries， aircraft components， integrated circuit and chips， but also service enterprises that engage in medical care， old-age care， ecommerce， cloud computing and R &D and the application of the Internet of Things technology.

The actual use of foreign capital by foreign M&A continued to increase. In January-June， a total of 674 newlyestablished foreign-invested enterprises were approved with an actual use of foreign capital RMB 92.17 billion （US$14.01 billion）， up 5.2% and 14.2% respectively year on year， taking up 5% and 20.9% respectively of their total figures.

Outward investment and economic cooperation

Foreign direct investment

In January-June 2016， the Chinese domestic investors carried out the nonfinancial direct investment in 4，797 outward enterprises in 155 countries and regions， with an accumulative investment of RMB$580.28 billion （US$88.86 billion， up 58.7% year on year）. In June， the foreign direct investment was RMB 100.17 billion （US$15.34 billion， up 44.9% year on year）. By the end of June， the non-financial direct investment of China amounted to RMB6.2 trillion （US$951.9billion）.endprint

Foreign contractual projects

In January-June， the turnover of the foreign contractual projects was RMB431.33 billion （US$66.05 billion）， down 2.2% year on year. The newly-signed contractual value was RMB 651.01 billion （US$99.69 billion）， up 15% year on year. The turnover completed in June was US$15.97 billion， up 0.4% year on year， and the newly-signed contractual value was US$24.20 billion， up 26.8% year on year.

Foreign labor cooperation

In January-June， China has sent all kinds of laborers abroad with a number of 223，000， with a decrease of 41，000 compared with that of the same period last year. In June， China sent 42，000 laborers abroad， with a decrease of 10，000 compared with that of the same period last year. By the end of June， the number of Chinas dispatched laborers reached 991，000， with a decrease of 24，000 compared with that of the same period last year.

In January-June， Chinas outward investment and economic cooperation mainly presented the following features：

The outward investment and cooperation maintained a rapid growth in general. In January-June， the Chinese domestic investors carried out the nonfinancial direct investment in 4，797 outward enterprises in 155 countries and regions， with an accumulative investment of US$88.86 billion， up 58.7% year on year. In June， the foreign direct investment was RMB 100.17 billion（US$15.34 billion）， up 44.9% year on year. The newly-signed contractual value was RMB 651.01 billion （US$99.69 billion）， up 15% year on year. The newly-signed contractual value in June was US$24.20 billion， up 26.8% year on year.

The distribution pattern of outward investment industry was further optimized. The investment in the manufacturing industry grew rapidly. In January-June， Chinas outward investment mainly flew to business service industry， manufacturing industry， wholesale and retail industry and mining industry， accounting for 24.6%， 19.8%， 16.4% and 4.7% of the total investment volume of the first half year respectively. The investment in the manufacturing industry reached US$17.59 billion， up 245.6% year on year. Among these， the investment flew to the equipment manufacturing industry reached US$12.04 billion， 5.4 times more than the same period last year， accounting for 68.4% of the outward investment of the manufacturing industry. The investment in the fields such as culture and education， art designer and sports， entertainment products manufacturing industry， papermaking and paper products， comprehensive usage industry of waste resources and medicine manufacturing industry realized a high-speed growth of more than 4 times and the international capacity cooperation showed a favorable momentum.endprint

The contractual project business of the relevant countries along the line of the “Belt and Road” enjoyed a rapid development. In January-June， the Chinese enterprises signed 3，080 foreign contractual projects with 61 relevant countries along the line of the “Belt and Road”， with a newly contractual value of US$51.45 billion， up 37% year on year， accounting for 51.6% of the newly signed contractual value of the foreign projects of China in the same period. The contractual value of the Egypt new capital construction project undertaken by China State Construction Engineering Corporation reached US$2.7 billion， marking the biggest contractual project of the Chinese enterprises in the bid of the relevant countries along the line of the “Belt and Road” in the first half of this year.

The outward investment of provinces and cities along the line of the Yangzi River Economic Belt was active. In January-June， the outward investment of provinces and cities along the line of the Yangzi River Economic Belt was US$30.12 billion， 2.2 times over the same period last year， accounting for 33.9% of the total foreign direct investment of China， and accounting for 37.3% of the local outward investment. Among these， the investment flow of 5 administra- tive units at provincial level exceeded US$1 billion in the first half of this year， including Shanghai （US$14.52 billion， up 162% year on year）， Zhejiang （US$5.56 billion， up 173.8% year on year）， Jiangsu （US$3.86 billion， up 52.5% year on year）， Hunan （US$1.17 billion， up 20.7% year on year） and Chongqing （US$1.06 billion， up 35.8% year on year）.

The following is Shen Danyangs response to a hot sensitive issue.

Q： Recently， the international financial market has gone been undergoing remarkable fluctuations， the exchange rate of US dollar and pound fluctuated greatly. Will they have effects on the Chinese enterprises outward investment？

A： In the short run， factors such as the UKs leave from the EU indeed aggravated the fluctuations of the international financial market. The uncertainties of the external environment facing the Chinese enterprises increase and will influence the enterprises outward investment to some extent. But we believe the direct impact is limited. In mid-and-long run， we dont think that it can sustain within a short period of time. The international environment for investment tends to be good， while more and more new investment opportunities spring up. Overall， there are more opportunities for the Chinese enterprises to conduct foreign investment and cooperation. Therefore， we have reasons to believe that the Chinese outward investment will continue to maintain sound momentum of steady development.endprint