In the first three quarters of 2015, China’s outward investment and cooperation witnessed a rapid development. Nonfinancial direct investment overseas reached US$ 87.3 billion, up 16.5% year on year; the newly signed foreign contract projects volume reached US$ 137.6 billion, up 26.5% year on year, with the completed turnover of US$ 100.8 billion, up 9.2% year on year.
The official of the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce pointed out that, China’s investment and cooperation outward in the first three quarters mainly presented the following features:
1. Investment and mergers and acquisitions were active with prominent highlights. In the first three quarters, 324 overseas merger and acquisition projects were carried out by the Chinese enterprises, covering more than 50 countries and regions with the total actual transaction volume of US$ 20.18 billion, accounting for 23.1% of China’s total direct investment overseas. The merger and acquisition projects mainly covered 18 fields including manufacturing, software and information technology service, commercial service, construction, wholesale and retail. Main merger and acquisition projects included: China Minsheng Investment Corp., Ltd., the only private investment enterprises titled with “China”, purchased 100% stock rights of the Sirius Insurance Group registered in Bermuda with US$ 1.79 billion; CITIC Environmental Protection Investment Group Purchased 54.9% stock rights with US$ 730 million of the United Envirotech Ltd., a listed company in Singapore, which is another overseas merger and acquisition project of the Chinese enterprises in environmental protection and management after Beijing Capital Group purchased the TIP Group in Singapore with US$ 798 million last year.
2. Investment of non state-owned enterprises witnessed a rapid growth. In the first 3 quarters, the outward direct investment of non state-owned enterprises accounted for 67% of the total outward investment, up 10 percentage points compared with that of the same period of last year and up 38.2% year on year. The outward investment of private enterprises was up 179.6% year on year.
3. Outward investment of local enterprises realized a high-speed growth. In the first three quarters, the outward investment of local enterprises was US$ 53.86 billion, up 78.8% year on year, with the proportion over 60% for the first time, becoming an important power of outward investment. Shanghai, Guangdong and Beijing ranked the top 3, with outward investment of Shanghai Municipality reaching US$ 11.97 billion, 5.4 times that of the same period last year. The outward investment of Shanghai Free Trade Zone was US$4.53 billion, accounting for 37.8% of the total.
4. Foreign contract projects speeded up the transformation and upgrading. In the first three quarters, 479 foreign contract projects valued over US$ 500 billion were newly signed, with 63 newly added projects when compared with the same period last year, and with the total value of US$ 114.33 billion, accounting for 83.1% of the total newly signed contract value in the same period. At the same time, China’s foreign contract projects accelerated the transformation and upgrading, expanding to the high value added fields like general project contract, project financing, design and consulting, operation, maintenance and management.
At present, China’s stock of outward investment ranked the 8th in the world, and the flow ranked the 3rd. Outward investment and cooperation have entered into the fast track of development. Meanwhile, China is transforming from commodity export to capital export. China’s outward investment not only drove the development of China’s export-oriented economy, but also makes positive contributions to the world economic development and realizing reciprocal and win-win results. In some developing countries, China’s outward investment has helped them build a full set of industrial system in the fields of petroleum industry, electric power and transportation. It has also helped to complete a batch of symbol buildings, actively promoted the local economic and social development, increased employment and improved people’s livelihood.
The official of the Department of Outward Investment and Economic Cooperation said that, in the first three quarters, China’s outward investment and cooperation maintained a good momentum. It can be mainly attributed to the following factors:
1. The leading role of the strategy of “One Belt and One Road” was prominent. With the advancing of the strategy of “One Belt and One Road”, more and more countries show their strong will to strengthen investment and cooperation with China. In the first three quarters, Chinese enterprises invested directly to 48 countries along “One Belt and One Road”, with a total volume of US$ 12.03 billion, up 66.2% year on year, accounting for 15.3% of China’s total nonfinancial direct investment overseas. The investment mainly flowed to Singapore, Kazakhstan, Laos, Indonesia and Russia. At the same period, Chinese enterprises undertook 3,059 foreign contract projects in 57 countries along “One Belt and One Road”, with the newly signed contracts volume of US$ 59.11 billion, accounting for 54.3% of China’s total volume of foreign contract projects signed in the same period, and up 24.9% year on year; the complete turnover was US$ 44.02 billion, accounting for 43.7% of China’s total complete turnover of foreign contract projects in the same period, up 5% year on year, mainly covering electric power project, housing construction, communications engineering, petrochemical industry and communication and transportation construction.
2. International capacity cooperation accelerated. At present, the countries in the world have strong demands for economic development, promoting capacity level and improving infrastructure conditions. China boasts advantages in many fields like railway, electric power, communication and infrastructure construction. China’s capacity and technology advantages are complementary to the resources and market advantages of related countries. In foreign exchanges, many countries, especially the developing countries are looking forward to the capacity cooperation with China. International capacity cooperation will not only benefit China and the host countries of investment, the developed countries also welcome it. They are willing to expand the third party market jointly with China by making use of Chinas’ low-cost advantage of equipments and engineering. In the first three quarters, China’s international capacity cooperation enjoyed a strong growth, with the export of large-sized complete sets of equipments up 10% year on year; the outward direct investment of manufacturing industry was US$ 9.1 billion, up 85.7% year on year, accounting for 10.4% of the total outward investment.
3. The endogenous power of “going out” of the enterprises obviously became stronger. Recently, affected by the increase of factor cost such as the labor price, the profit margin of domestic enterprises was squeezed, and the enterprises were facing the task of transformation and upgrading. The enterprises objectively need to go out to broaden the foreign markets, and to integrate with the upstream and downstream industrial chains at the international market. The enterprises speeded up their pace to carry out outward investment and cooperation.
4. The comprehensive results of the business environment and policies were improved continuously. The Ministry of Commerce continued the promotion of outbound investment facilitation, and executed the record filling management as the primary mode, in order to create a favorable business environment for the enterprises to carry out outward investment and cooperation. We actively built the cooperation platforms for outward investment and cooperation, signed the investment and cooperation agreements with Columbia and Costa Rica, and completed the FTA negotiation with Australia and ROK. We have practically conducted the construction of major projects, and actively promoted the progress of “Industrial partners” with related countries, and constructions of transnational and trans-regional infrastructure cooperation, connectivity and outward economic and cooperation zones. We have strengthened supports to investment and financing, and have implemented the policies of privileged credits, project financing and export insurance. We aim to make the financing platform connect with the international cooperation projects and to bolster the investment and cooperation with related countries.
