Mubasher: China’s outbound foreign direct investment (OFDI) has shifted its direction towards Europe rather than North America in the first six months of the year, reports showed.

In addition, outbound direct investment (ODI) rose in H1-18, recording a surge in the first five months of the year, according to official data.

The volume of Chinese mergers and acquisitions (M&A) announced in Europe totalled $22 billion in the period between January to June, taking over North America by $2.5 billion, law company Baker Mckenzie and independent research firm Rhodium Group said on Monday.

Moreover, the value of finalised Chinese investments in Europe exceeded those in North America five times, citing lower regulatory hurdles, more predictability in political ties. “Europe offers a great base for industrial high-tech assets, which is a good match with Chinese regulators' outbound investment priorities," Rhodium Group's cross border investment director Thilo Hanemann said.

Sweden topped the list of largest European destinations for Chinese investors in the first half of the year, followed by the UK, Germany and France.

In addition, the sector composition of Chinese OFDI also saw a notable change in the January-June period of 2018, the report said.

Chinese OFDI flows were mainly directed to the so-called “real economy” industries such as auto manufacturing, healthcare and biotechnology, and consumer goods and services in both regions.

On a side note, China’s ODI climbed 18.7% to $57.18 billion year-on-year in the first half of 2018.

In the period between January to May, the world’s second-largest economy’s ODI flows jumped 38.5% to $47.89 billion from a year earlier, according to data released by China’s Ministry of Commerce on Tuesday.