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China's Outbound Investment Soars in 2005
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China's outbound investment totaled US$5.65 billion in the first 11 months of this year, indicating the nation has intensified its role as global investor for the second consecutive year.

The number was three times the investment outlaid during the period last year, January to November. But due to PC maker Lenovo's acquisition of IBM last December, the total outbound investment for 2004 leapt to US$5.5 billion, jumping 93 percent over the year before.

A statement released yesterday by the Ministry of Commerce reported that China, long a hot-spot for global investment, is itself emerging as a global investor.

Although the outbound investment remains relatively small compared to the country's inward foreign direct investment (FDI) of US$53 billion, China is steadily increasing its investment in the world, the official said.

Attracting the most investment from Chinese firms were the information and telecom industries, and the mining and manufacturing sectors -- with combined investment totaling 90 percent of the January to November figure.

Asia remains the largest destination for Chinese investment, accounting for two-thirds of the investment in the first 11 months of 2005.

But investment in North America, Africa and Oceania is accelerating, with all destinations registering a year-on-year growth of more than 80 percent.

Investment cases with a US$10 million value represent more than 60 percent of the total outbound investment from January to November.

In fact, compared with small and medium-sized counterparts, large-scale Chinese companies are showing a stronger inclination to launch and increase their volume of overseas investment, according to an earlier survey by the China Council for the Promotion of International Trade (CCPIT).

About 23 percent of surveyed companies expressed intent to increase outward investment, either substantially or moderately, within the next 12 months.

The survey revealed this figure will increase to over 40 percent in two to five years.

Sun Bosheng, a foreign investment researcher from the Chinese Academy of International Trade and Economic Cooperation, said the Chinese Government is strengthening its guidance of outward investment. He explained that application procedures are being simplified and services improved to better facilitate outward investment.

For instance, in May the Ministry of Commerce established a reporting mechanism for overseas mergers and acquisitions. Once informed of a merger intention, the ministry provides the Chinese firm with relevant data, including the policies, regulations and investment environment of the target countries.

Meanwhile, according to the Ministry of Commerce, from January to November Chinese contractors signed more than US$25 billion worth of overseas projects. That's a 20 percent increase over last year.

(China Daily December 27, 2005)

 

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