CHINA remains the single largest contributor to global economic growth and its influence is growing by way of increasing overseas investment. Indicative of this is the fact that in 2016 China’s outward foreign direct investment (OFDI) surpassed inward FDI for the first time in recent history.
The latest edition of The China Compass from the Beijing Axis states that in 2016 there was record outflow of investment from China totalling US$183.1 billion while inward FDI was about US$135 billion. China was second in OFDI behind the US with $299 billion.
It says although China is in a long-term structural adjustment phase towards lower GDP growth, it maintains world-leading growth rates and this year GDP growth reached 6.9%.
The hallmarks of China’s new economic growth model are growing domestic demand, particularly from the increasing middle class, and increased outward investment, despite recent state-imposed OFDI curbs.
“For the last 30 years China has traditionally been a net importer of FDI, with the country being an attractive investment destination since the mid-1990s, however recent years have seen China evolve into a major global investor,” The China Compass states.
This new role is characterised by a surge in outward M&A, with traditional ‘old economy’ deals overshadowed by emerging ‘new economy’ outbound deals, as Chinese companies recognise the need to invest in foreign technology and expand market reach.
The OFDI flow is geographically diverse. Apart from Asia, attention is increasingly concentrated in North America and Europe. In 2015 Asia received US$108.4 billion, or 70%, North America $10.7 billion, Europe $7.1 billion, Latin America $12.6 billion, Africa $3 billion and Oceania $3.9 billion.
Long-term resource security concerns have seen strong OFDI in overseas mining. The China Compass says in 2015 mining received US$11.3 billion and was fifth highest sector behind leasing and business services, financial services, manufacturing, and wholesale and retail trade. This was up from $5.7 billion in 2010.
Much of the OFDI occurs through M&A although over the last 10 years deal-making in traditional industries like mining have slowed while the chemical and logistics industries have seen large activity.
“China is the world’s largest exporter and ranks only behind the US as the largest importer. China’s position as a trade behemoth and its favourable trade surplus give it the necessary economic clout to make valuable overseas investments,” it adds.
Trade with Asia and Europe is being enhanced by the Belt and Road Initiative, and this will increase as links become established.
Major Chinese miners are embracing the initiative. China National Gold Group is looking to intensify exploration and investment in Silk Road countries while Zijin Mining has projects in three countries along the route as part of its ‘Go Global’ strategy, and Zhaojin Mining Industry Co has set a three-to five-year horizon to set out along the route.
北京中外商桥咨询服务公司最新版的《The China Compass（中国指南）》杂志指出，2016年中国对外投资达到了创纪录的1831亿美元，而对内直接投资为1350亿美元。中国位列全球直接对外投资（OFDI）总量第2位，第1位美国的总量为2990亿美元。
对资源长期安全性的考虑导致了对海外矿业领域的直接投资。《The China Compass》指出，2015年，对矿业领域的投资为1130亿美元，位列租赁和商业服务业、金融服务业、制造业、批发和零售业之后，排名第5。这比2010年的57亿美元大幅上升。