Is Chinese overseas investment about to surge back?

Will the Chinese investment drought be over soon? Outbound investment from the nation fell 29.4 percent in 2017 to $120 billion, according to newly released government figures, but some observers expect capital controls to be lifted in 2018.

“The tighter capital controls, which was the biggest reason behind the slump in (overseas direct investment), will gradually be eased as the yuan stabilizes,” Standard Chartered economist Ding Shuang told Bloomberg. “Policy makers will approve more overseas acquisitions and mergers with real business needs — this is necessary as the nation seeks to open up the economy and internationalize the yuan.”

The Yuan’s value rose 6.8 percent against the dollar last year.

Beijing started implementing capital controls in late 2016 to slow down investment outflows and stabilize the country’s currency. Over the course of 2017, regulators also tightened the screws on several large conglomerates that had invested heavily in New York real estate, such as Anbang Insurance Group and HNA Group.

As a result, Chinese interest in New York real estate cooled noticeably, contributing to an overall market swoon.  [Bloomberg] — Konrad Putzier