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China investment surges

May 15, 2015

With China's growth slowing, domestic investors have been eyeing foreign companies. The country's own appeal as an investment destination continues to decline, but overseas direct investment surges.

China Investitionen in Deutschland Symbolbild
Image: picture-alliance/dpa

China's outbound non-financial direct investment (ODI) jumped 36.1 percent to $34.97 billion (30.72 billion euros) in the first four months of 2015, the country's Commerce Ministry said on Friday.

China has been actively acquiring foreign assets, particularly energy and resources, to power its economy, as its firms are encouraged to make overseas acquisitions to gain market access and international experience.

Investment into the European Union leaped by 487 percent, mainly due to a petrochemical deal in the Netherlands, while it increased 33.5 percent into the US, the Ministry said, declining to give further details.

ODI into Germany surged 246 percent year-on-year in the first quarter to $210 million, Ministry spokesman Shen Danyang told reporters.

The two economies are "strongly complementary," and Beijing will continue to "encourage and support" Chinese companies investment in Germany, he said.

Germany Trade & Invest, an economic development agency, said in a report last month that China was the country's largest greenfield investor in 2014 with 190 projects. The term greenfield investment refers to multinationals setting up entirely new operations in a foreign country, usually a developing economy.

"Investment cooperation can not only help Chinese firms obtain advanced technology and international distribution networks to improve their competitiveness, but also can benefit German companies with market access in China and expand their market share," Shen said.

China's Commerce Ministry had reported on Wednesday that foreign direct investment (FDI) during the same period leaped 11.1 percent from a year earlier to $44.5 billion. For the month of April, FDI increased 10.5 percent from a year earlier to $9.6 billion, it added.

From January to April, EU investment into China rose 22.2 percent to $2.52 billion.

el/ng (Reuters, AFP)

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