Saturday, September 25, 2021

China’s Outbound Investment Reaches All Time High

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In 2013, China was the world’s third largest investor for the second consecutive year, according to Chinese news agency Xinhua.

Outbound direct investment, or ODI, from China hit a record high of $108 billion or £66.98 billion last year, a rise of 22.8 per cent on the ODI made two years previously in 2012, Xinhua reported.

On Sunday the Chinese government announced that it would begin to relax rules regarding Chinese companies making investments overseas, with the new rules set to come in to effect on the 6th of October.

Xinhua said that the new procedures for domestic companies, which were outlined by the Chinese Ministry of Commerce on Sunday, were “aimed at allowing more freedom for outbound investment.”

At this moment in time, Xinhua explained, any overseas investment project worth more than $100 million needs to be fully checked and approved by the Ministry of Commerce. However, any investments made into foreign or overseas projects in “sensitive countries or regions, and also including sensitive industries” would still be required to wait for approval from the Chinese government,.

Whilst China may have been the world’s third biggest investor last year, according to data that they produced themselves, it is possible that this years figures could change that.

According to data collected by The Heritage foundation, an American philanthropy organisation, China’s investment around the world slimmed slightly in the first half of this year. The foundation’s data, covers large Chinese investments and contracts all around the globe.

Australia, the US, and Canada are at the top of the list for most popular destinations for investment out of China, followed fairly closely by Brazil and Indonesia, these two countries are considered perhaps the most promising, lucrative, growing investment markets in the world.

Around 50 per cent of the money invested overseas and abroad by China and China based companies in the past 10 years has been invested within the energy and power sector, it is believed that the need for new infrastructure in developing economies such as Brazil and Indonesia are going to significantly increase the usage of electricity in their respective countries and therefore this will be very lucrative business for the chinese who have decided to invest in the industry

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