ODI to exceed FDI by 2017, EUI says
April 30, 2013 Category Foreign investment, Weekly
China’s outbound direct investment (ODI) is expected to exceed foreign direct investment (FDI) in the country by 2017, a study by the Economist Intelligence Unit (EIU) says. It predicts that ODI will jump from USD115 billion last year to USD172 billion in 2017, exceeding the amount of foreign funds coming into the country. “Within five years, China’s role in the global economy will completely change, which is to be out, investing overseas,” Robin Bew, Chief Economist of EIU said. Between 2005 and 2012, outbound investment by Chinese firms grew at an average pace of 35% year-on-year, with China’s global investment ranking climbing from 16th place to third place, after the United States and Japan. By 2017, it would become the world’s second-largest overseas direct investor, behind only the U.S., Bew said. The EIU forecasts that China’s investor focus will shift from seeking natural resources to acquiring market access, technologies and brands. Privately-owned businesses have become increasingly active in chasing overseas investment projects, with the share of state-owned companies (SOEs) falling. In 2005, Chinese ODI flows were reported in just 17 predominantly resource-rich countries, according to data from the Heritage Foundation. By last year, that number had increased to 63.
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