Now China is 5th largest global investor

BEIJING - China has surged in both outbound and inward investments and now ranks fifth largest investing nation worldwide with outbound direct investment (ODI) totalling $56.5 billion, a media report said Monday.

In 2008, it ranked 12th. In addition, foreign direct investment (FDI) was set to “surpass $100 billion this year”, compared to $90 billion last year, the commerce ministry said.

Globally, foreign investment decreased by 40 percent last year amid financial downturn and is expected to show only marginal growth this year, China Daily reported citing the ministry.

The growth in both outbound and inbound investments reflects China’s rising economic power as well as an attractive destination for investments.

The ministry made the announcements during a press conference in Xiamen Sunday. The meeting was called to brief on the upcoming UN Conference on Trade and Development (UNCTAD) and the 14th China International Fair for Investment and Trade Tuesday.

It said, China’s ODI grew by 1.1 percent from a year earlier to $56.53 billion, which includes investment of $47.8 billion in non-financial sectors worldwide, up 14.2 percent year-on-year.

Last year was the eighth consecutive year that the nation’s ODI had grown. In this period, the average annual growth rate stood at more than 50 percent.

“China is now the fifth largest investing nation worldwide, and the largest among the developing nations,” said Shen Danyang, vice-director of the ministry’s press department.

In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.

But “this is just a beginning”. Although the figure is already “quite amazing”, the volume is “not large enough” considering China’s economic growth and local companies’ expanding demand for international opportunities, Shen said.

“The growth rate (for ODI) in the next few years will be much higher than previous years,” Shen noted.

Fan Chunyong, standing deputy chief of the China Industrial Overseas Development and Planning Association, said: “China’s ODI will go up to $100 billion in 2013, and the Chinese accumulative overseas investment will reach $500 billion by then.”

According to the ministry, by the end of 2009, 13,000 Chinese enterprises had invested in 177 nations and regions worldwide, and the largest volume of funds went to the Asia-Pacific region. Europe and Africa ranked second and third in absorbing Chinese investment.

However, the European Chamber of Commerce said in a report Thursday that China had made progress on improving its investment environment, but still needed to do more, especially on market access and regulatory environment.

While global FDI slumped by almost 40 percent last year, China’s FDI was down by a mere 2.6 percent, according to the UNCTAD. China remained the second largest recipient nation of FDI after the US.

During the first seven months, China’s FDI increased by 20.7 percent to $58.35 billion, and FDI in July surged by 29 percent.