China's outbound direct investment soared in the first five months to 278.4 billion yuan ($44.84 billion), official data showed, closing a gap with foreign direct investment inflows as local firms flock overseas for growth opportunities.
The 47.4 percent jump in outbound investment, made by non-financial firms, built on the 36.1 percent rise in the first four months.
In the first five months of the year, FDI grew 10.5 percent from a year earlier to 331.0 billion yuan, marking a slight slowdown from 11.1 percent growth in January-April, the Commerce Ministry said on Thursday.
The government has been encouraging firms to invest abroad to slow down the rapid build-up of foreign exchange reserves and help local firms become more competitive internationally.
Analysts expect outbound investment will soon match and overtake the weakening investment inflows, reflecting a cooling economy which in turn seems to have prompted a large jump in outbound flows as businesses looked for growth elsewhere.
"The outbound investment is quickening. It's very likely to surpass foreign direct investment this year," said Han Xiushen, a researcher at the commerce ministry's think-tank.
She expects more Chinese firms to invest overseas under Beijing's "One Belt, One Road" initiative to develop trade and transport infrastructure across Asia and beyond.
"The domestic economy is slowing and firms need to find a way to export excess production capacity".