A MOFCOM spokesperson holds a press regular press conference in Beijing File photo: VCG

The growth of foreign direct investment (FDI) by Chinese companies was flat in the first half of the year compared with the first half of 2018 as economic growth faced downward pressure, according to official data released on Tuesday.

In the first six months of 2019, China’s outbound FDI in non-financial sectors grew by 0.1 percent year-on-year to 346.8 billion yuan ($50.43 billion), despite a 6.3 percent year-on-year expansion in June, data from the Ministry of Commerce (MOFCOM) showed.

The growth rate is significantly lower than the same period in 2018, when outbound FDI rose 17.8 percent year-on-year. 

The flat growth came after the government tightened regulations on investment in areas such as real estate and entertainment after a global shopping spree by Chinese companies a few years back. The move to tighten controls also came as domestic and external conditions weakened due to a slowing economy..

In the first half of 2019, Chinese companies conducted 161 merger and acquisition (M&A) deals worth $16.95 billion in 42 countries and regions, including Finland, France and Peru, according to the MOFCOM. The M&A deals were mostly in manufacturing, software and information technology sectors and there was no new deal in the real estate, sports and entertainment sectors, it said. 

Though the MOFCOM didn’t provide any geographic breakdown of FDI, a report from global law firm Baker McKenzie showed that Chinese FDI into Europe slumped to a four-year low in the first half and that into North America saw just a modest increase.

During the period, Chinese FDI into Europe fell 26 percent year-on-year to $9 billion, with Finland seeing the most investment followed by Sweden, the UK and Italy, according to the report sent to the Global Times. 

Chinese FDI into the US increased 19 percent from a low base to $3.3 billion in the first six months, the report said.

Newspaper headline: Outbound FDI flat amid slowing economy, tighter regulation