Man­u­fac­tur­ing ODI rises in Jan

China Daily (Canada) - - LIFE - By LI XIANG lix­i­ang@chi­

China’s out­bound di­rect in­vest­ment in over­seas man­u­fac­tur­ing sec­tors surged dra­mat­i­cally in Jan­uary, high­light­ing the shift of Chi­nese­cap­i­tal into tech­nol­ogy-in­ten­sive projects from tra­di­tional en­ergy- and re­source-fo­cused ones, of­fi­cial data showed onWed­nes­day.

China’s ODI in the man­u­fac­tur­ing sec­tor rose by 87.8 per­cent in Jan­uary on a year-onyear ba­sis to 10.6 bil­lion yuan ($1.62 bil­lion), ac­cord­ing to the Min­istry of Com­merce.

A ma­jor chunk of the cap­i­tal flowed into the telecom­mu­ni­ca­tions, elec­tronic equip­ment, phar­ma­ceu­ti­cal and au­to­mo­bile man­u­fac­tur­ing sec­tors, Shen Danyang, the min­istry’s spokesman, told anews con­fer­ence in Bei­jing.

Mean­while, in­vest­ment in man­u­fac­tur­ing equip­ment surged by 128.3 per­cent yearon-year, ac­count­ing for more than half of the to­tal in­vest­ment.

Mark­ing a sound start to this year, to­tal ODI rose 18.2 per­cent year-on-year in Jan­uary to 78.76 bil­lion yuan, ac­cord­ing to the min­istry.

The growth of China’s out­bound in­vest­ment ben­e­fited from the coun­try’s Belt and Road Ini­tia­tive de­signed to im­prove re­gional con­nec­tiv­ity be­tweenAsia, Europe and Africa and fa­vor­able govern­ment poli­cies to fa­cil­i­tate in­dus­trial co­op­er­a­tion be­tween Chi­nese com­pa­nies and in­ter­na­tional play­ers, Shen said.

The fresh in­vest­ment data also re­in­forced the struc­tural change of China’s out­bound in­vest­ment, said Xu Hong­cai, di­rec­tor of the eco­nomic re­search depart­ment at the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes.

“Slump­ing oil and com­modi­ties prices sup­pressed the in­vest­ment de­sire of Chi­nese com­pa­nies in en­ergy sec­tors while the tech­no­log­i­cal and­hu­man­re­source ad­van­tages in the man­u­fac­tur­ing sec­tors of de­vel­oped economies con­tinue to at­tract Chi­nese

Slump­ing oil and com­modi­ties prices sup­pressed the in­vest­ment de­sire ...”

in­vest­ment,” he said.

Di­rect in­vest­ment in the United States by Chi­nese com­pa­nies soared to 10.2 bil­lion yuan in Jan­uary, nearly four times the amount of in­vest­ment in the same pe­riod of last year, ac­cord­ing to of­fi­cial data.

Re­cent high pro­file M&A deals by Chi­nese com­pa­nies in the US in­clude Shan­dong­based house­hold ap­pli­ances multi­na­tional Haier Group’s $5.4 bil­lion pur­chase ofGen­eral Elec­tric Co’s ap­pli­ances busi­ness and pri­vate con­glom­er­ate Dalian Wanda Group’s $3.5 bil­lion ac­qui­si­tion ofHol­ly­wood film­maker Leg­endary En­ter­tain­ment.

“The po­ten­tial of the US mar­ket as well as its brand­ing and in­tel­lec­tual prop­erty as­sets are among the fac­tors that help drive the growth of Chi­nese in­vest­ment,” said Lu Jiny­ong, di­rec­tor of in­ter­na­tional in­vest­ment re­search cen­ter at the Univer­sity of In­ter­na­tional Busi­ness and Eco­nom­ics in Bei­jing.

The de­sire of Chi­nese pri­vate com­pa­nies to di­ver­sify as­sets in ma­ture mar­kets will con­tinue to drive China’s di­rect in­vest­ment in the US, Lu added.

Lo­cal en­ter­prises rather than cen­tral State-owned ones were the main con­trib­u­tor to out­bound di­rect in­vest­ment.

China has sur­passed Canada to be the largest trad­ing part­ner of theUS, with bi­lat­eral goods trade reach­ing $598 bil­lion last year.

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