Compared to the sluggish recovery of global outbound direct investment (ODI) this year, China's ODI saw continuous growth following 2012 and served to further the development interests of both China and the rest of the world.
From January to November 2013, China's ODI in non-financial sectors amounted to 80 billion U.S. dollars, up 28 percent from the same period in 2012, according to China's Ministry of Commerce (MOC). China became the world's third-largest investor for the first time last year when its outbound direct investments (ODI) rose 17.6 percent to 87.8 billion U.S. dollars.
ODI in Russia, the U.S. and the EU surges
Data released by the MOC on December 18 show that in the first 11 months of 2013 China's ODI went to 4,522 overseas enterprises covering 156 countries and regions. ODI in seven major economies and areas including Hong Kong, ASEAN, the EU, Australia, Japan, Russia and the U.S. reached about 58 billion U.S. dollars, accounting for 72 percent of the total investment. In particular, ODI in Russia, the U.S. and the EU increased by 685 percent, 232 percent and 90 percent respectively.
Characteristics of China's ODI
China's ODI in 2013 showed two general characteristics. First, although large state-owned enterprises were still the main drivers, investment by local businesses (including private enterprises) saw rapid growth and accounted for nearly 30 percent of the total value. Second, in terms of sector distribution, business services, mining, wholesale and retail trade, construction and manufacturing were favored by Chinese investors.
However, China's ODI is low as a whole. According to the MOC, by the end of 2012, China ranked 13th in the world, with its total volume of ODI equating to 10 percent of the U.S., 29 percent of the U.K., and 34 percent of Germany.
In addition, due to the obstacles set by the U.S. and some European countries, China's ODI in high-tech industries remains relatively low. For example, Huawei and Sany were blocked from making investments in the U.S. and forced to abandon their plans.
Chinese investment creates "Made in Africa"
On the African continent, from Egypt to South Africa, Chinese investment is creating a group of "Made in Africa" companies. In Egypt, the launch ceremony was held on November 27 a glass fiber production plant representing an investment of more than 200 million U.S. dollars by China Jushi Group, the company will become the leading fiberglass manufacturer in the Middle East.; In Ethiopia, Chinese-funded glassworks, tanneries, and automobile assembly plants have become the industrial jewels in the crown of Africa"; in South Africa, a China FAW automobile production base is under construction…
By the end of 2012, China's manufacturing investment in Africa had reached 3.43 billion U.S. dollars. Chinese investors bring capital, technology and equipment to local businesses, and more importantly, they bring experience, ideas and confidence in economic development.
Whether in Africa or in Latin America, Chinese investment is helping countries to escape from the trap of backward infrastructure.
Foreign trade and economic cooperation zones
The establishment of foreign trade and economic cooperation zones represents a new bright spot in China's outbound investment.
As of the end of October, China has built 16 such zones in 13 Asian and African countries, with of the value of funds applied reaching 4.4 billion U.S. dollars. The areas involved include textiles, home appliances, steel, building materials, chemicals and machinery. The zones have become an important platform for the development of overseas SMEs.
Investment agreement negotiations
China has launched investment agreement negotiations with the EU and the US this year, which will promote two-way investment between China and the world's major economies.