China becomes favorite investment destination for multinational corporations

Among the world's top 15 most attractive investment destinations, nine are in developing countries and transition economies, and China ranked first as the favorite investment destination for multinational corporations, according to "World Investment Prospects Survey 2010-2012 Report" released by United Nations Conference on Trade and Development (UNCTAD) on Sept. 8.

The report said that global foreign investment will recover this year and the outlook for growth is optimistic. Global foreign direct investment is expected to rise to 1.2 trillion U.S. dollars in 2010 and reach 1.3 trillion to 1.5 trillion U.S. dollars in 2011, and in 2012 it will further increase to between 1.6 trillion and 2 trillion U.S. dollars. A strong recovery of the cross-border mergers and acquisitions will be the main driver of this growth.

UNCTAD conducted a survey on the 236 largest multinational companies and investment promotion agencies in 116 countries. Zhan Xiaoning, director of the Investment and Enterprise Department of UNCTAD, said that 62 percent of respondents were optimistic or very optimistic about the prospects for investments.

Multinational executives believe that the damaging effects of the economic crisis are smaller than previously thought. Most executives believe that the crisis has led companies to cut the budget of direct foreign investment, while another 20 percent of executives said their companies adopted large-scale divestment and other extreme measures like stopping overseas operations.

The report mentioned that, according to feedback responses of the investment promotion agencies, China's foreign direct investment growth is impressive, ranking after the United States, and China is the world's second largest foreign investor with the greatest investment potential from 2010 to 2012, ranking ahead of Germany, Britain and France.

Zhan said outward investment by Chinese enterprises will transform into intensive investment and investment in the industrial chain.

By Huang Beibei, People's Daily Online