China's surging outward investment indicates resolution to open wider (3)

Ethiopia commenced its first refrigerated train service via the Chinese-built Ethiopia-Djibouti Railway in August 2020, exporting loads of avocados to Europe. (Photo courtesy of the China Civil Engineering Construction Corporation)

In recent years, China has constantly consolidated its position as a major country in outward investment and economic cooperation, which mirrors its efforts to push forward with opening-up at a higher level.

China's outbound direct investment bucked the trend last year despite the impacts from COVID-19, with improvements made in both quantity and quality.

According to the 2020 Statistical Bulletin of China's Outward Foreign Direct Investment recently issued by China's Ministry of Commerce, National Bureau of Statistics, and the State Administration of Foreign Exchange, the country's outbound direct investment surged 12.3 percent from a year ago to $153.71 billion last year. The volume accounted for over 20 percent of the world's total, making China rank the first place worldwide for the first time ever. The country is gaining an increasingly larger influence on the sphere of direct investment.

Chinese enterprises are building their global reach, allocating their production factors and resources, and actively joining international competition and cooperation. It fully indicates the resilience and vitality of China's new system for higher-level open economy. The country's outbound direct investment has injected huge positive energy into the global economic recovery.

By promoting international production capacity cooperation and focusing its outbound direct investment in the real economy, China has played a vital role in stabilizing international industrial and value chains.

Last year, the country's outbound direct investment covered 18 major industrial sectors, and nearly 70 percent of it went to leasing and commercial services, manufacturing, wholesale and retail, and finance.

China made investment in more than 80 percent of countries and regions around the world, with Belt and Road countries gradually becoming hot destinations. In 2020, Chinese investors established over 11,000 enterprises in Belt and Road countries, and the total investment added up to $22.54 billion, soaring 20.6 percent on an annual basis and accounting for 14.7 percent of the world's total investment volume during the same period.

China's outbound direct investment came from both the public and the non-public sectors. The non-public sector made non-financial foreign investment of $67.16 billion the last year, accounting for 50.1 percent of the total and growing 14.1 percent.

China's outward investment and economic cooperation, on stable and healthy development, is constantly expanding its size, optimizing its structure, and improving its benefits, delivering win-win results. It has made positive contributions to developing China's economic and trade relations with relevant countries and building an open world economy.

The Chinese economy has gone through profound globalization, and is highly connected to the industrial chains and production factor markets of many countries around the world. Chinese-funded multinationals are important carriers of the global industrial and value chains.

Pursuing opening-up on all fronts, at multiple levels and in a wide range of areas, China is opening its doors wider. Last year, both the foreign direct investment into China and the country's outward investment witnessed growth, and the Chinese and international markets and resources have become more connected.

By comprehensively improving the level of its opening-up, building a new system for higher-level open economy, opening up more sectors of the economy in a more thorough fashion, and exploring more efficient ways to connect domestic and foreign markets and share factors of production and resources, China is both absorbing energy from the world and benefiting the world with its own development.

Chinese enterprises, capital, personnel and technologies going global to dock with production factors and consumption markets worldwide will further strengthen economic globalization and the development of the world economy.

(Wang Youxin is a researcher with the Bank of China Research Institute.)