China’s Outbound Direct Investment Surges
China’s non-financial outbound direct investment (ODI) continued to grow as companies capitalize on opportunities overseas, official data Thursday showed.
China’s non-financial ODI increased 16.5% Y-Y to US$87.3 in the 1st 3 Quarters of 2015, the Ministry of Commerce (MOC) said Thursday.
Foreign-contracted projects rose to US$137.6-B during the January-September frame, up 26.5%from last year. Accomplished turnover climbed 9.2% to US$100.8-B according to MOC.
The fast growth was led by the Belt and Road Initiative, a trade and investment project initiated by China. In the 1st 3 Quarters, Chinese companies’ ODI to countries along the Belt and Road jumped 66.2% to US$12.03-B, accounting for 15.3% of total non-financial outbound investment. Singapore, Kazakhstan, Laos, Indonesia, and Russia were among the most popular investment destinations.
Zhou Liujun, head of the MOC Department of Outward Investment and Economic Cooperation, also attributed the rise to the progress in international production capacity cooperation, companies’ growing desire to expand overseas as domestic profits wane, and a reduction in administrative approvals.
Zhou said he had also seen new trends in China’s outbound investment. Investment by non-state-owned companies and local businesses, for example, rose 38.2 percent and 78.8 percent year on year respectively in the first three quarters, making them the main source of outbound investment.
Mergers and acquisitions overseas by Chinese enterprises totaled US$20.18-B, accounting for 23.1% of total ODI. The number of new foreign contracted projects valued at more than US$50-B rose to 479, 63 more than last year. More contracts in financing and consulting indicated a smooth transition toward high value-added projects for Chinese enterprises, Zhou said.
China became a net capital exporter for the 1st time last year when ODI outnumbered foreign direct investment (FDI). ODI grew 14.1% in Y 2014, eclipsing the 1.7% FDI growth.
By Song Miou
Paul Ebeling, Editor
HeffX-LTN
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