Wire: BLOOMBERG News (BN) Date: 2008-06-20 10:00:09
China's Overseas Investment Growth Cools, SAFE Says (Update1)

          (Adds analyst's comment in the third paragraph.)

By Zhang Dingmin and Judy Chen
     June 20 (Bloomberg) -- China's net financial assets abroad
rose 67 percent in 2007 from a year earlier to $1.022 trillion
while growth in overseas securities investment declined, the
country's currency administrator said.
     Overseas securities holdings, including stocks and debt
investment, expanded by 4.5 percent to $239.5 billion from $229.2
billion a year ago, according to a statement on the Web site of
the State Administration of Foreign Exchange, slower than the
annual growth of 96.4 percent in 2006.
     ``The sharp decline was due to lack of investment
opportunities abroad during the time of the subprime crisis,''
said Liu Dongliang, a foreign-exchange analyst at China Merchants
Bank Co. in Shenzhen. ``It was even harder to find an overseas
security that yields a higher return than the yuan's
appreciation.''
     Financial assets rose by 39 percent to $2.28 trillion, while
liabilities increased 23 percent to $1.27 trillion, SAFE said.
Direct investment abroad totaled $107.6 billion at the end of
last year.
     The yuan appreciated 7 percent versus the dollar in 2007,
making it the fourth-best performer among the 10 most-active
currencies in Asia outside Japan.

For related news:
Most-read stories on China's economy: MNI CHECO 1M <GO>
Stories on China economy: NSE CHINA ECONOMY IN WIRE: BN <GO>
News on China's currency: NSE YUAN IN HEADLINE <GO>

--Editor: Eugene Tang, Simon Harvey

To contact the reporter for this story:
Zhang Dingmin in Beijing at +86-10-6535-2334 or
Dzhang14@bloomberg.net;
Judy Chen in Shanghai at +86-21-6104-7047 or
xchen45@bloomberg.net.

To contact the editor responsible for this story:
Tom Kohn at +852-2977-6610 or
tkohn@bloomberg.net

 
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