BEIJING: Both China’s outbound direct investment to the world and foreign direct investment into the country saw strong growth between January and July, leaving the world’s second-largest economy firmly on track to meet its growth target in 2015.
FDI into China grew 7.9 percent year-on-year to 471.1 billion yuan ($74 billion) through the first seven months of this year, while China’s ODI grew at a dynamic pace in the January-July period, jumping 20.8 percent on a year-on-year basis to $63.5 billion, data from the Ministry of Commerce shows.
The country became a net capital exporter last year as the ODI figure of $116 billion exceeded capital inflows for the first time.
Wang Shouwen, vice-minister of commerce, said the fast-growing pace of ODI can be attributed to a range of developments that have taken place at home and abroad.
“In addition, FDI into China’s nonfinancial sector is expected to increase by 4 percent year-on-year to $125 billion this year, which would be helpful to boost the country’s high-end manufacturing industries and the service sector,” said Wang.
Eager to seek more suitable investment destinations via the trading passage of the 21st Century Maritime Silk Road initiative, negotiations to upgrade the China-ASEAN Free Trade Agreement are expected to be concluded by the end of this year.
China is discussing finer details on services and goods trading, as well as investment and technology collaboration with the 10 members of the Association of Southeast Asian Nations.
ASEAN is China’s third-biggest trading partner, with trade between the two worth over $480 billion in 2014, up 8.23 percent from a year earlier.
The region hopes to achieve bilateral trade with China worth $500 billion by the end of this year and $1 trillion by 2020, with two-way investment levels of $150 billion by 2020.
Ni Chao, vice-mayor of Xiamen, said sustainable development will become a key factor in determining the nation’s future economic shape.
“The European debt crisis to a certain extent offers Chinese companies an opportunity to acquire high-end and greener European companies, especially ones in Italy, Germany, the Netherlands and the United Kingdom, at bargain prices,” Ni said.
ODI from China’s manufacturing sector jumped by 63.1 percent to $5.09 billion in the first half of this year. The country shipped complete equipment worth $60 billion, including units for nuclear power stations, waterworks and railways－a 10 percent year-on-year increase.
Cao Hongying, deputy director-general of the Foreign Investment Administration at the Ministry of Commerce, said investment into the Chinese mainland from major countries and regions including the United States, the European Union and the Hong Kong Special Administrative Region showed a steady growth during the first seven months.
Official data showed that although the FDI into the manufacturing sector has been waning through the first seven months, it has been rising in the services sector.
Most of the FDI from Europe and other developed nations is already flowing into the services sector with an overwhelming focus on high-end manufacturing.
“The healthcare, information services and high-tech industries are being slowly developed in the country. There should be more foreign capital and technologies in these sectors,” Cao said.
