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China Now in Top Five in Terms of Overseas Investment 



China moved up in 2010 into the number five position in terms of overseas investment, surpassing Japan who had previously held this position.  According to the United Nations Conference on Trade and Development (UNCTAD), the top five countries in terms of outbound investment are the US, Germany, France, Hong Kong and China.  Last year, the Chinese mainland's outbound direct investment (ODI) grew by 17 percent to a historic high of $68 billion.  China's accumulative ODI by 2010 grew tenfold from a decade ago to $300 billion, ranking 17th worldwide.  According to the UN report, China's outbound mergers and acquisitions topped $29 billion last year, accounting for 43 percent of the total overseas investment. 

Most Chinese companies' overseas investments are concentrated in energy and resources sector.  Most of the total investment is in energy investments(oil, coal and other energy) and commodities (metal, rubber, etc.). Wang Zhile, Director-General of Beijing New Century Academy on Transnational Corporations, in a July 27 news report noted that the growth in China's outbound investment is a recent development. Most of the investment didn't start till about three years ago, and it will take time before overseas projects can generate any returns.  "China is still at a primary stage of ODI," said He Weiwen, co-director of the China-US/EUSudy Center of the China Association for International Trade, noting that various problems in the ODI may exist at the initial stage. 
TREND OF CHINA TRADE SURPLUS
(May 2010-May 2011)
China Import/Export data
Despite various problems, Wang still sees bright prospects for China's outbound investment. "China's ODI is expected to be equal to the foreign direct investment in China in five years, which is generally considered a healthy ratio."

According to He, Chinese mainland's ODI is mainly directed at the developing areas like Asia and Latin America, among which investment in Hong Kong accounts for nearly 75 percent of the total ODI.  He added that State-owned companies have undertaken almost 69 percent of the total outbound investment


CHINA'S INVESTMENT IN ASEAN COUNTRIES

For China, ASEAN has been viewed as both potential market and investment base, given proximity and land links. China's direct investment to the Association of Southeast Asian Nations (ASEAN) countries stood around 2.57 billion U.S. dollars since the China- ASEAN Free Trade Area came into force one year ago, according to an official from  China's Ministry of Commerce (MOC), reported Xinhua News Agency in China.  ASEAN market, with a total population of nearly 600 million, is attractive and given ASEAN FTA (AFTA) in place, many types of goods produced in and traded among country members are enjoying zero duty. These factors have so far contributed to China's increasing investment into ASEAN's industrial sector. (more at our article "maximizing trade under the ASEAN-CHINA FTA")

 
  China's investment in:






China investment in Southeast Asia




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