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Home >> Business
UPDATED: 10:32, March 01, 2005
China's overseas investment on the rise
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A survey of Chinese companies' investment intentions in Europe and North America has found that nearly 50 per cent of them intend to go global within the next two years.

In response to a question about when they intend to set up an overseas base, 48.4 per cent said within the next two years.

Another 21.1 per cent of enterprises felt they would be ready to invest offshore within four years.

Some 42.9 per cent of companies intend to make an initial investment or reinvestment of US$1 million to US$5 million.

And 19.8 per cent of the companies said they would invest more than US$10 million, a figure indicating the strong financial positions and confidence in overseas markets of domestic firms.

The research was conducted by the Chinese Academy of International trade & Economic Co-operation, a think-tank under the Ministry of Commerce, and was sponsored by the Welsh Development Agency (WDA), a UK government-funded body helping companies locate in Wales.

The research project questioned senior executives at 102 internationally-active Chinese enterprises in fourteen of China's provinces.

The United States, Germany and Britain were ranked top by Chinese enterprises when presented a list of 40 European and North American investment destinations.

The first motivation for Chinese companies' investment in Europe and North America is market expansion, followed by development strategies and partnership seeking, according to Xing Houyuan, an expert from the academy and the project's team leader.

The establishment of agencies and representative offices is the predominant investment model as 69.8 per cent of the respondents chose it, Xing said.

Almost half of the companies surveyed would like to open joint ventures or set up wholly-funded companies in Europe and North America.

And 34.4 per cent intend to acquire local companies.

Acquisition is mostly favoured by home appliance manufacturers as 45.5 per cent of the companies in the industry said they would buy foreign counterparts.

Andrew Davis, the WDA's Asia Pacific executive vice-president, said his organization wanted to understand the real drivers behind outbound Chinese investment.

These research findings will help Wales build a promising environment for Chinese investors that want easy and inexpensive access to European markets.

Wales is already home to several Chinese enterprises.

Respondents to the survey cited low taxes and subsidies as the policies most likely to make them choose an investment destination, Xing said.

Conversely, visa issues and access to market information were cited as key frustrations for Chinese investors looking to expand into developed markets, she said.

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