Chinese overseas investment jumps by $91 billion to hit record high

BEIJING - China's overseas investment hit a record high as its companies look to build more factories abroad, potentially helping to ease criticism of Beijing's export policies.

Chinese firms increased their overseas assets by about US$71 billion (S$91 billion) in the second quarter, according to revised data from the State Administration of Foreign Exchange (Safe) on Sept 30. That is an increase of more than 80 per cent from a year ago and the highest level since records began in 1998.

Leading the charge were companies in sectors where China is outpacing competitors, like electric vehicles and solar energy.

These investments might help ease trade tensions by creating jobs and economic growth in foreign markets, rather than overwhelming them with exports that could hurt local producers.

But some economists have called those flows into question, with a new database compiled by research firm Rhodium Group indicating that actual foreign investment has been much lower in recent years.

Safe's data may be inflated by significant "phantom" capital driven by financial considerations, not real economy investment, said analysts from Rhodium.