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| Overseas investments almost triple: China |
| Bloomberg / Hong Kong Oct 28, 2009, 00:34 IST |
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China predicted an acceleration in industrial production and reported a 190 per cent jump in overseas investment for the third quarter, underscoring the nation’s role in driving a global economic recovery.
Investment by Chinese firms abroad rose to $20.5 billion in July through September, almost triple a year earlier, the Ministry of Commerce said in a statement. Industrial output may rise 16 per cent in the fourth quarter, Ministry of Industry and Information Technology official Zhu Hongren said in a briefing, compared with a 13.9 per cent pace of gains in September.
Policy makers may be encouraging Chinese companies to invest abroad in part to help counter pressure for the nation’s currency to appreciate, analysts said. Investors are betting on the yuan to gain in the coming year as China’s growth accelerates from its weakest pace in a year.
“China’s growth is certain and stable,” said Zhu Jianfang, an economist at Citic Securities Co in Beijing. “Chinese policy makers see pressure for yuan to appreciate, so they encourage companies to invest abroad to strike the balance.”
Tuesday’s figures came after the government last week reported that China, the world’s third-biggest economy, expanded 8.9 per cent in the third quarter, the fastest pace in a year.
The economy is showing more signs of stabilising, the National Development and Reform Commission said in a statement on its website, adding that the government’s stimulus measures have been effective.
Yuan forwards, which rose to a 14-month high last week, suggest the currency will gain 2.3 per cent against the dollar in the coming year. The 12-month offshore contracts were down 0.2 per cent today to 6.6730. The yuan climbed 21 per cent over three years after the government scrapped a fixed exchange rate in July 2005. China’s policy on yuan will remain stable until the nation’s exports recover and improve, Jiang Jianjun, an official in the foreign trade department of the Ministry of Commerce said.
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