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Chinese Cross-Border Investment Not Choked Off
China’s cross-border capital flow is expected to continue, despite the most recent round of controls by China’s State Council and National Development and Reform Commission. CBRE researchers note the impacts should be relatively light and “more nuanced.”
Overseas property investments tied to China’s “Belt and Road” infrastructure development are still encouraged, as well as those connected to high-tech industries or high-end manufacturing. China will remain the largest Asia-Pacific source of capital for global CRE investments, though CBRE researcher Henry Chin notes, “the pace of capital deployment is likely to slow as investors adjust to the new rules and fine-tune their investment strategies.”
Since late 2016, China imposed measures to restrict capital leaving the country and bolster the yuan. As a result, Chinese investment in real estate overseas dropped 82% to $25.6 billion during H1 2017 compared to last year. Chinese sovereign wealth funds accounted for $13.3 billion of investment.
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