Angelo Katsoras, an analyst at National Bank Financial (NBF) notes that a substantial capital flight combined with the risk of private companies suffering heavy losses on overseas investments prompted Chinese authorities, beginning in 2017, to implement strict capital controls in order to reduce and redirect outbound investments.

• “Another factor that has reduced outbound investment is that China’s continued push to have its firms invest abroad in strategic sectors such as IT, robotics and agriculture is being met with more and more resistance from countries not wanting to lose control of strategic assets.
• The fact that foreign companies are for the most part prevented from purchasing similar Chinese assets has only bolstered this resistance. Not surprisingly, all of these factors have caused overseas acquisitions by Chinese companies to plummet to $24.5 billion in the first half of 2019.
• According to Dealogic, this is down 42% from the same period a year earlier and represents less than 20% of the most recent peak reached in the first half of 2016. The decline includes a significant drop in real estate purchases. Chinese investors acquired a total of $15.7 billion worth of overseas real estate in 2018, down 63% from 2017.11 The decline in Chinese foreign direct investment has been particularly significant in the United States and Europe.”