China expects recovery and steady growth in higher-quality inbound and outbound investment, says KPMG

China sees recovery and steady growth in higher-quality inbound and outbound investment as the country enters a historic 'new era' in its economic, political, cultural and social development, KPMG said.

This will support the ongoing transformation and upgrading of the Chinese economy as well as the vitality and resilience of global trade and investment flows, according to a report of KPMG China released at a closed-door meeting on Thursday.

"Without a doubt, China will continue to be an important source of growth for companies around the world – not only because of the ongoing expansion and transformation of its economy, but also because the Belt and Road initiative will lead to more win-win-win cooperation between Chinese and foreign companies in third-country markets," Bill Thomas, chairman of KPMG International, said at the meeting. 

While growth in inward foreign direct investment has slowed, the market and policies for foreign investment are still expected to improve as China transitions to a 'new economic cycle', leading to a rebound in high-quality FDI, the report said.

KPMG also forecast that China’s outbound investment will keep a medium-high level of growth in tandem with the B&R initiative while tighter scrutiny on outbound investment will, hopefully,  lead to Chinese companies to focus on  high-quality, value-added investments, according to the report..

These efforts will create more opportunities for international private capital to invest alongside Chinese state capital, sovereign wealth funds and Chinese private capital in these projects.

Private capital, Chinese companies and enterprises from third countries will also be able to cooperate in project advisory services, investment and financing, operating and managing infrastructure assets, supplies of advanced equipment and raw materials, the report said.

"Over the longer term, Chinese outbound investment and Chinese market demand will play a key role in the global economic recovery and the development of a new, more ‘inclusive’ model of globalization," said Honson To, chairman of KPMG China and Asia Pacific.