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Media Report
January 02 , 2017
  • Financial Times writes that Chinese companies invested a record $45.6bn in the US in 2016 despite a presidential campaign heavy on Beijing bashing. But Donald Trump's imminent arrival in Washington is among factors making the feat unlikely to be matched this year, according to a new report.The surge in Chinese foreign direct investment into the US documented by Rhodium Group, a research firm, led the annual flow of corporate acquisitions to triple over 2015 levels. It also took the stock of China's long-term investment in physical assets over $100bn for the first time, with Chinese companies now employing more than 100,000 people in the US. The increase in Chinese investment highlights the changing nature of the economic relationship between the US and China. For decades, US-based multinational companies have been building factories and making other substantial investments in China. But little direct investment has flowed the other way, although Beijing has parked trillions of dollars of its foreign exchange reserves in US Treasuries.

  • Reuters reports that China will not allow anyone to use Hong Kong as a base for subversion against mainland China or to damage its political stability, Beijing's top official in the territory told state television.Chinese leaders are increasingly concerned about a fledgling independence movement in Hong Kong, which returned to mainland rule in 1997 with a promise of autonomy known as "one country, two systems", and recent protests in the city. In an interview with state television broadcast late on Sunday, Zhang Xiaoming, the head of China's Liaison Office in Hong Kong, said Beijing will not interfere in matters that purely affect Hong Kong's autonomy. "As far as Hong Kong is concerned, nobody is permitted do anything in any form that damage the country's sovereignty and security, they are not allowed to challenge the central government's authority or that of Hong Kong's Basic Law, they are not allowed to use Hong Kong for infiltration subversion activities against the mainland to damage its social and political stability," Zhang said.
  • Financial Times reports that China has tightened checks on citizens exchanging foreign currency in anticipation of renewed downward pressure on the renminbi in the new year.Banks have been asked to improve standards for verifying customers' identities and to report "large or questionable transactions", the State Administration of Foreign Exchange (Safe) said in a public statement at the weekend. "There have been leaks in China's system of personal foreign exchange purchases," the statement said, giving as an example the way individuals and companies avoid capital controls on overseas investments by disguising their transactions as goods purchases. China's policymakers have clamped down on capital flows leaving the country in recent weeks, imposing fresh restrictions on outbound corporate acquisitions and investments. European companies have reported difficulties in remitting dividends to stockholders abroad. The restrictions are partly an attempt to keep the renminbi from steep falls in the future after it depreciated almost 6 per cent against the dollar in 2016.

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