China’s outward foreign direct investment (FDI) for the first five months of 2015 was up nearly 50 percent from the same period in 2014, a Chinese Ministry of Commerce spokesperson said last week. According to Shen Danyang, as cited by People’s Daily, China’s non-financial investments in foreign markets totaled more than 278 billion RMB ($45 billion) from January to May of 2015 – up 47.4 percent year-on-year.
China’s total outward FDI has skyrocketed over the last 10 years, going from a mere $5.5 billion in 2004 to $101 billion in 2013, according to the UN Conference on Trade and Development. Recently, the trend of expanding outward FDI has accompanied falling inward FDI rates, as China’s economic growth slows. This has led China’s Commerce Ministry to predict that China will be “a net outbound investment country” in 2016.
The FDI push is largely being driven by China’s state-owned enterprises (SOEs), which account for 70 percent of China’s non-financial, outward FDI. The central government has urged state firms to ‘go global,’ promising financing support to encourage outward investments. The policy seems to be paying off.
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