Call for in­vest­ing in di­verse over­seas projects

China Daily (Hong Kong) - - BUSINESS COMPANIES - By LYU CHANG lvchang@chi­nadaily.com.cn

Vice-Pre­mier Wang Yang called on Tues­day for out­bound in­vestors to ex­plore new ar­eas such as in­fra­struc­ture, re­new­able en­ergy and ad­vanced man­u­fac­tur­ing.

“Last year, China ranked third in the world in terms of out­ward di­rect in­vest­ment flows, af­ter the United States and Ja­pan, but there’s much room for fur­ther de­vel­op­ment,” he said.

In­vestors can broaden their co­op­er­a­tion scope and im­prove the level of bi­lat­eral or mul­ti­lat­eral eco­nomic and trade co­op­er­a­tion, he said at the open­ing cer­e­mony of Fifth China Over­seas In­vest­ment Fair, which ends to­day in Bei­jing.

Wang added that the ap­proval process for out­bound in­vest­ment will be short­ened to help Chi­nese en­ter­prises to go global.

In 2012, China’s over­seas in­vest­ment reached $87.8 bil­lion, up 17.6 per­cent year- on- year. In the first 10 months of this year, the na­tion’s ODI rose 19.6 per­cent to $69.5 bil­lion, ac­cord­ing to the Min­istry of Com­merce.

Out­bound in­vest­ment is now ris­ing faster than for­eign di­rect in­vest­ment into China.

Zhang Xiao­qiang, vicem­i­nis­ter of the Na­tional De­vel­op­ment and Re­form Com­mis­sion, said that over­seas in­vest­ment is likely to hit a record this year.

“We are pretty sure that this year, we will be able to re­al­ize our goals for eco­nomic and so­cial de­vel­op­ment, and that will make China a strong di­rect in­vestor on the global stage,” Zhang said.

The world’s sec­ond­largest econ­omy has seen rapid eco­nomic growth amid re­form and openingup dur­ing re­cent decades, prompt­ing more do­mes­tic com­pa­nies to ex­pand and pur­sue merger and ac­qui­si­tion deals in over­seas mar­kets.

Those moves have al­lowed com­pa­nies to se­cure re­sources and im­prove their core com­pet­i­tive­ness.

But China’s ODI lacks bal­ance in terms of in­vest­ment re­gions and in­dus­tries, in­dus­try sources said.

A re­port from global con­sult­ing com­pany Ernst & Young LLP said that en­ergy and met­als drew the most money. Those sec­tors ac­counted for about 70 per­cent of China’s out­bound FDI dur­ing the pe­riod from 2005 to June 30 this year.

Eleanor Wu, head of the trans­ac­tion ad­vi­sory ser­vices depart­ment at E&Y, said that en­ergy and min­ing re­main the top tar­gets for China’s out­bound in­vest­ment, both in deal num­bers and value, and that’s ex­pected to con­tinue.

“If you look at the merger and ac­qui­si­tion ac­tiv­i­ties this year, nine big deals in the en­ergy and min­ing sec­tor reached more than $ 100 mil­lion for the first eight months of this year,” she said, adding that those deals are key for China to se­cure en­ergy sup­plies for grow­ing do­mes­tic de­mand.

“But sec­tors in­clud­ing agri­cul­ture and food prod­ucts and re­new­able en­ergy are grow­ing as well,” she said.

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