Chinese companies more than doubled their foreign direct
investments (FDI) last year with the outbound figure reaching
US$12.3 billion which is a rise of 123 percent year-on-year. The
figure brought the mainland's accumulated overseas investment to
US$57.2 billion at the close of 2005.
The latest figures were released in the China Outbound
Investment Statistics Report issued jointly by the Ministry of
Commerce and the National Bureau of Statistics. The report doesn't
include financial sector investment. It identifies half of the
investment as being related to mergers and acquisitions.
The 2005 World Investment Report issued by the United Nations
Conference on Trade and Development identifies China's overseas FDI
as accounting for 1.68 percent of all international foreign
investment flow last year. Its accumulated FDI made up 0.59 percent
of the global total.
Chinese limited liability companies, representing 32 percent of
registered investors, surpassed State-owned enterprises with their
share of outbound FDI last year. The slice taken by State-owned
enterprises dropped to 29 from 35 percent in 2004.
More than half of the registered investors put their money into
manufacturing industries abroad ranging from textiles, shoes,
computers, machinery and pharmaceuticals.
Over 60 percent of overseas investors come from coastal regions
such as Zhejiang, Guangdong and Shandong provinces. Of the total number of
registered investors 949 come from east China's Zhejiang Province
which is 23.6 percent of the total.
China's FDI went into 163 countries and regions across the world
covering 93 percent of Asia and 85 percent of Europe. Some 46
percent of the investors chose Hong Kong, the United States, Japan
and Russia. Hong Kong boasts the highest rate of 16.5 percent.
The government has been calling on domestic companies to
accelerate their foreign interests for years. It remains a major
task for the commerce ministry during the country's 11th Five-Year Plan (2006-10) but outbound
investment has seen big rises over the past two years.
The Ministry of Commerce has adopted various measures to help
enterprises travel overseas. The trade watchdog set up a reporting
mechanism last year requiring companies to report their overseas
merger and acquisition plans.
It proposes to use the data to provide companies with
information about potential investment destinations including the
policies, regulations and general investment environment of other
countries. It'll also assist in analyzing any possible risks
in new locations.
The government also simplified application procedures and
improved its services for outward investment information. A service
center has also been established in Beijing to accept complaints
concerning barriers to investment from outbound investors.
However, despite the moves the country's outward investment is
still small compared to the US$60.3 billion of foreign investment
to China in 2005.
(China Daily September 5, 2006)