Chinese ODI comes close to $200b in 2016

A shopper takes an escalator heading to a duty-free shop in downtown Shanghai. [Photo/VCG]

China's overseas direct investment is estimated to soar 40 percent to a record $189 billion in 2016 from the previous year, according to a study released by the US consultancy Rhodium Group and Berlin-based Mercatur Institute for China Studies.

Europe emerged as a key investment destination, as the country's investments in the EU jumped 77 percent to over 35 billion euros, with Germany grabbing 11 billion or 31 percent of the total, according to the report.

Chinese investors have shown particular interests in advanced manufacturing and service sectors, it noted, citing last year's mega deals including the acquisition of KUKA, Skyscanner and the cinema chain Odeon.

Such trends coincided with China's latest move to warn against State-owned enterprises' outbound investments in mining or heavily polluting industries.

Although official full-year ODI data is not yet available, Rhodium Group expects the increase will cement "China's role as one of the top direct investor nations globally".

However, the report also noted China is implementing more "stringent reviews" for certain outbound investment deals with the goal of cracking down on illegitimate transactions, which are to blame for putting increasing downward pressure on the renminbi.

The country's top State-owned assets regulator plans to further enhance the accountability and risk control of overseas acquisitions by the SOEs, according to documents released early last month.

Unreasonable cases may still exist as the outbound investments soar, and such risks, once unguarded, may backfire on both sides.

Therefore it's necessary to appeal for prudent investments, said Xu Shaoshi, head of the National Development and Reform Commission, at a press conference in January, adding that "the overall support for Chinese firms going global hasn't and will not change".