Non-resident capital flows into China to grow in 2019: report

Non-resident capital flows into China reached US$485 billion in 2018, and are expected to grow by US$90 billion, or 18.6 percent in 2019, new data from the Institute of International Finance showed.

According to the capital flows report released by the IIF on Friday, China's net foreign direct investment bounced back from an outflow of US$42 billion in 2016 to an inflow of US$107 billion last year.

The IIF, a Washington-based association of global financial institutions, predicts China's net FDI to be around US$70 billion per year in 2019 and 2020.

The report noted that China attracted large portfolio inflows last year, with its bond market bringing in US$100 billion in 2018, up from US$88 billion in 2017. China also attracted US$61 billion of equity inflows last year, up from US$36 billion of inflows in 2017.

The IIF report expects net portfolio flows into China to reach US$105 billion and US$111 billion in 2019 and 2020, respectively.

The report forecasts a "relatively modest" rebound in non-resident capital flows to emerging markets this year and next year, due to loose monetary policy in developed economies such as the United States, Europe and Japan.

The IIF projected inflows of US$1,260 billion for emerging markets in 2019, up from US$1,135 billion in 2018, with a further modest recovery next year.

"Overall, however, we believe the world is a more difficult place for emerging markets that depend on foreign capital inflows," the report said.