Last updated at: (Beijing Time) Wednesday, January 07, 2004

UN report: China becoming major investor abroad

Statistics from UNCATD show that China's direct overseas investment exceeded US$35 billion in 2003, covering more than 160 countries and regions.


As CNRadio cited United Nations Radio as saying, United Nations Conference on Trade and Development (UNCATD) said that China is not only a major receiver of foreign direct investment but also is gradually turning into an exporter of capital.

Statistics from UNCATD show that China's direct overseas investment exceeded US$35 billion in 2003, covering more than 160 countries and regions.

When accepting the interview by Yao Yongmei, a reporter with UN Chinese Radio, Zhan Xiaoning, a senior official on investment with UNCATD first talked about the general situation regarding the constant expansion of Chinese enterprises' investment overseas.

Zhan Xiaoning: In recent years, especially in the past 10 years, China has not only jumped to the front ranks in terms of absorption of foreign investment, but has also made a leap forward in its investment overseas. For instance, in 1991, the stock of China's investment abroad, or its total investment overseas, was around US$3 billion. This figure rose to about US$15 billion in 1995 and the accumulative total of its overseas investment reached about US$35 billion last year, a figure that sounds amazing. For example, the scale of China's investment overseas is by and large equivalent to that of the Republic of Korea (ROK). Why, then, China's investment is said to have not received international attention? One of the main reasons is that there are defects in China's statistics in that financial institutions lack special statistics on overseas investment, there are neither statistics on private enterprises' overseas investment, nor are there statistics on the reinvestment made by some original State-owned enterprises abroad. In fact, according to the statistics from UN Trade and Development organization, China's investment overseas is developing very rapidly with a strong momentum.

Yao Yongmei: As you've just mentioned, the scale of China's investment overseas is expanding, then what are the types and ways of China's investment?

Zhan Xiaoning: China's investment is multi-faceted in terms of the composition of investment. There are not only resources-oriented investment, but also market-oriented, efficiency-oriented even technology-oriented investment. What we call market-oriented investment means that the investment of many enterprises, for example, household electric appliance enterprises like Haier is made in local production and sales. Resources-oriented investment means that some Chinese enterprises need to import certain resources from abroad in order to have a stable source of resources. Besides the method of importation, another method for absorbing overseas resources in a more stable and secured way is to make overseas investment in natural resources and do exploitation, for example, they have invested in iron mines, oilfields and aluminum mines abroad. China has a lot of such big investment in Australia, South America and North America. Another type is what we call technology-oriented investment, a new tendency appeared in the past one or two years. It means that some Chinese enterprises buy the advanced technologies and brands of some enterprises in developed countries, purchase some enterprises, and then put the products manufactured with their brands into the international market. Another type is efficiency-oriented investment overseas. This kind of investment requires being close to the market and making use of the cheap labor and some preferential policies of the host countries to sell products to the surrounding markets and developed countries. This kind of investment mainly exists in some developing countries. For example, Haier Group has invested in household electric appliances production bases in Pakistan and Bangladesh, Iran and Nigeria. Hisense Group also has some joint ventures and solely-funded factories producing televisions in South Africa, Brazil and Indonesia. Other enterprises such as Konka, TCL and Kelon from Guangdong Province have also established factories in developing countries selling products in local markets on one hand and exporting to surrounding countries on the other.

Yao Yongmei: You just mentioned four types of investment, resources-, market-, efficiency- and technology-oriented. According to the four types, investments flow to both developing and developed countries. Are there statistics showing in which country does China make more investment? Is there a list giving the names in order?

Zhan Xiaoning: The list is just a rough one arranged in light of regions. China invests the most in Asia, the Asia-Pacific region. If the investment in Hong Kong and Macao, which is included in that in Asia, is deducted, North America receives more investment, and then comes Africa, and then Latin America and Europe. In terms of country, investment is made mainly in the United States, Canada and Australia. Then come Thailand and Russia.

By People's Daily Online

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