Private companies leading in outbound investment
September 26, 2016 Category Foreign investment, Weekly
China’s private companies have taken the lead over state-owned enterprises (SOEs) in the country’s surging outbound investment for the first time. Private enterprises are leading in both the amount invested and the number of mergers and acquisitions (M&As) abroad. The change has taken place as outbound direct investment (ODI) surpassed foreign direct investment (FDI) last year. Private companies account for 65.3% of total ODI, which amounted to USD145.7 billion by the end of last year, according to the 2015 Statistical Bulletin of China’s Outward Foreign Direct Investment. Meanwhile, ODI surged by more than 18% last year, exceeding the USD135.6 billion in FDI, said a report jointly issued by the Ministry of Commerce (MOFCOM), the National Bureau of Statistics (NBS) and the State Administration of Foreign Exchange (SAFE). “The private companies have really become an important force in driving the growth of outbound investment,” said Zhang Xiangchen, Deputy International Trade Representative at the Ministry of Commerce. Private deals account for 75.6% of the total amount of overseas acquisitions, Zhang added. Chinese aviation and shipping conglomerate HNA Group bought total foreign assets worth at least USD17 billion last year. Even though SOEs still have a competitive edge over their private peers in such highly regulated industries as electricity, energy and mining, that has not dimmed the enthusiasm of private companies for overseas growth, the China Daily reports.
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