China’s State Administration of Foreign Exchange (SAFE), the country’s exclusive manager of almost $2 trillion foreign exchange reserves, has lost more than $80 billion in its diversification into global equities. Details of SAFE’s holdings are only disclosed to the top Chinese leadership, a fact that makes exact estimates about China’s losses in its international investments rather complicated. Conservative estimates by economists from the Council on Foreign Relations in New York hover around $160 billion in overseas equities and a subsequent loss due to falling stock markets of $80 billion.
Foreign direct investment (FDI) in China continued its decline in February and dropped 15.8 percent from a year earlier. The youngest decline follows a 32.6 percent drop in January and marks the fifth month of falling FDI in China.
China’s outbound investments rose 24.8 percent in the first two months of 2009, according to the Ministry of Commerce. Overseas contractual projects reached around $8 billion as Chinese companies are increasing their international outreach.