Outbound FDI up 123 per cent in 2005

Chinese companies more than doubled overseas direct investments last year.

Outbound foreign direct investment (FDI) reached US$12.3 billion, up 123 per cent year-on-year. The figure brought the mainland's accumulated overseas investment to US$57.2 billion by the end of 2005.

The latest figures were released in the China Outbound Investment Statistics Report, jointly issued by the Ministry of Commerce and the National Bureau of Statistics. They do not include investment to financial sectors.

Half of the investment was through mergers and acquisitions, the report said.

According to the 2005 World Investment Report issued by the United Nations Conference on Trade and Development, China's overseas FDI accounted for 1.68 per cent of the global total international foreign investment flow last year. Its accumulated FDI made up 0.59 per cent of the global total.

Limited liability companies, representing 32 per cent of registered investors, surpassed State-owned enterprises in share of outbound FDI last year.

The share of State-owned enterprises dropped to 29 per cent from 35 per cent in 2004.

More than half of the registered investors poured their money into manufacturing industries abroad ranging from textiles, shoes, computers, machinery and pharmaceuticals.

Over 60 per cent of overseas investors came from coastal regions, such as Zhejiang, Guangdong and Shandong provinces. Among them some 949 of the registered investors, or 23.6 per cent of the total, came from East China's Zhejiang Province.

China's FDI poured into 163 countries and regions across the world, covering 93 per cent of Asia and 85 per cent of Europe.

Some 46 per cent of the investors chose Hong Kong, the United States, Japan and Russia. Hong Kong boasts the highest rate of 16.5 per cent.

The government has been calling on domestic companies to accelerate their steps abroad for years. It remains a major task for the commerce ministry during the country's 11th Five-Year Plan (2006-10), and outbound investment has seen big rises over the past two years.

The Ministry of Commerce has adopted various measures to help enterprises travel overseas.

The trade watchdog set up a reporting mechanism last year, requiring companies to report overseas merger and acquisition intentions.

It plans to use the data to provide companies with information about the potential investment destination, including the policies, regulations and the investment environment. It will also help by analyzing possible risks there.

The government also simplified application procedures and improved its services for outward investment information.

A service centre has also been established in Beijing to accept complaints concerning barriers to investment from outbound investors.

However despite the moves the country's outward investment is still small compared to the US$60.3 billion of foreign investment to China in 2005.

Source: China Daily