China to be net investor as ODI exceeds FDI
June 30, 2014 Category Foreign investment, Weekly
China’s outward investment (ODI) is very likely to exceed foreign direct investment (FDI) inflows this year, making the country a net investor, according to the United Nations Conference on Trade and Development’s World Investment Report. This “inevitable trend” will have “great significance in reshaping the economic structure and long-term development” of China, the report said. In 2013, China’s foreign direct investment rose by 2.3% year-on-year to USD123.9 billion, ranking second in the world after the United States. “The quality of FDI inflows improved, with more into high-end manufacturing and services with high added value,” said Zhan Xiaoning, Director of the Investment and Enterprise Division at UNCTAD. In 2013, investment outflows from China increased by 15% year-on-year to USD101 billion, the third highest in the world after the United States and Japan, the report said. As China continues to deregulate outbound investment, outflows to developed and developing countries are expected to grow further, it said. “China’s economic landscape, driven by exports and foreign investment in the past three decades, will change significantly. Outward investment will serve as an important driver for industrial upgrading and economic growth,” Zhan said. Liang Guoyong, Economic Affairs Officer at UNCTAD, said: “It is very hard to predict when China will become a net investor, but the trend is inevitable.” Huo Jianguo, President of the Chinese Academy of International Trade and Economic Cooperation, a Ministry of Commerce (MOFCOM) think tank, said China’s new role as a net investor will help ease trade frictions.
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