In the report we look at the prospects for GDP growth in the light of the first quarter GDP figure of 7.4 percent, which is below the government’s 2014 target, and consider what impact the “mini-stimulus” measures may have.
Although overall Outbound Domestic Investment (ODI) in the first quarter was down on a year-on-year basis, we saw an increase in M&A activity with deals of significant size in the high-tech, telecom, industrial goods, and agriculture sectors, as China seeks to upgrade industrial and market competitiveness. Meanwhile, following a number of recent policy announcements, the process for Chinese companies to invest in overseas markets should be significantly simplified. First quarter foreign direct investment (FDI) increased by 5.5 percent year-on-year, buoyed by the service industry’s significant 21 percent year-on-year growth. Interior regions of China continue to see growth in FDI activity although coastal areas are still the primary destination overall.