China has pulled back on its overseas investments. It will not likely return to its former free-spending ways any time soon.
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Official Ministry of Finance figures, not surprisingly, offer a soothing picture of moderate decline, but private sources tell a much more dramatic story. According to the American Enterprise Institute’s well-regarded China Global Investment Tracker , Chinese overseas investments of all kinds in the first half of this year averaged only $27.5 billion, half the rate averaged during the same time in 2018 and barely a quarter the rate of 2017’s first half.
More significant is China’s relative shortage of hard currency. Despite Beijing’s efforts to make the yuan a global currency, it is little used in currency transactions – no more than 2% of the total in fact – and so is of little use in overseas purchases. Meanwhile the trade war with the United States has already begun to cut into Beijing’s supplies of foreign exchange.
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