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10% rise in China overseas investment

China's overseas direct investment is projected to rise at least 10 percent annually for the next five years, a trend that will soon make the country a net capital exporter, a senior commerce ministry official said on Wednesday.

"It's only a matter of time," said Zhang Xiangchen, an assistant minister at the Ministry of Commerce (MOFCOM), referring to when China's outbound investment will eclipse inbound investment.
"If it doesn't happen this year, it will happen in the near future," he added.

Speaking on Wednesday at a news conference to publicize new regulations meant to simplify overseas investments for Chinese companies, Zhang said the value of overseas assets held by Chinese firms still lagged behind foreign competitors, including in the energy and natural resource sector.

The Chinese government's push to stoke overseas investment is part of an effort to slow the rise of its foreign currency reserves at home, while helping domestic companies buy assets, resources and technology overseas.

Although Chinese outbound direct investment is expected to reach $120-billion this year, Zhang said, Chinese firms' holdings equalled only a tenth of the assets held by American firms and only half those held by Japanese companies.

Under the revised rules, which were first published in September, most domestic firms will no longer need to seek MOFCOM approval prior to making an overseas investment, but must register the investment with regional regulators.

MOFCOM approvals only are required for non-financial outbound investments in "sensitive countries and regions" and "sensitive sectors." The regulator also eliminated approval requirements for the formation of offshore special purpose investment vehicles.

The new rules also greatly simplify approval and filing procedures and reduce the time allowed to review overseas investments.

Of the total 6 608 overseas investments approved by MOFCOM in 2013, only 100 deals – mostly in "sensitive" sectors related to national security – would require approval under the new regulations, Zhang said, adding that companies have so far reacted "very positively" to the changes.

The MOFCOM regulations follow similar rules issued by the National Development and Reform Commission in April which stipulate that regulatory approval only is required for investments in excess of $1-billion or if a project involves a sensitive country, region or sector.

China is moving to diversify its $4-trillion in foreign exchange reserves, while reporting its slowest economic growth since the global financial crisis. On Tuesday, China said its economy grew 7.3% in the third quarter, the slowest pace since the first quarter of 2009.

Chinese firms, including Shanghai-based conglomerate Fosun International Ltd and Beijing-based Anbang Insurance Group, made $74.96-billion in offshore acquisitions in the first nine months of the year, a 21.6% rise from a year earlier. Foreign direct investment amounted to $87.36-billion in the same period.

Earlier this month, Anbang Insurance entered into an agreement with Hilton Worldwide Holdings Inc to purchase its flagship Waldorf Astoria New York hotel for $1.95-billion.

Zhang noted that Chinese energy and mining companies hold fewer overseas assets compared to companies from developed countries. The energy and mining sectors accounted for 16.7% of Chinese companies' overseas holdings, a proportion Zhang considered low.

"Energy and natural resources is something we need," he said. "Importing the energy and resources we lack to manufacture for the world's consumer is very normal."

In 2013, China's non-financial direct investment overseas amounted to $90.17-billion, a rise of 16.8% from a year earlier, according to MOFCOM statistics. Total non-financial foreign direct investment at year's end amounted to $525.7-billion.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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