Trade minister upbeat on fast-growing ODI
China’s foreign trade grew at its weakest pace in the past two years since the openingup of the economy began some three decades ago, but its share of global trade and outbound investment is still rising, a senior commerce official said. “Compared with inbound investment, China’s outbound investment is expected to take off in the coming years,” said Commerce Minister Gao Hucheng during an interview at the ministry’s annual meeting on Friday.
Gao said China’s total outbound investment is expected to reach $90 billion this year, a year-on-year increase of 15 percent.
Trade has given Chinese enterprises the money, technology and management skills to invest abroad.
“With the economic recovery, developed countries are in need of updated infrastructure. In developing countries, there are markets for Chinese companies to build entirely new infrastructure projects,” said Gao.
In a few years, China’s overseas investment may surpass the foreign direct investment it attracts, experts said.
In the January- November period, Chinese investors splashed out $ 80.24 billion in nonfinancial direct investment, up 28 percent from the same period last year.
During the same period, China’s actual use of foreign capital was $105.5 billion, up 5.48 percent, according to the ministry.
The trend of rising Chinese ODI “will be pulled up by China’s high savings rate and Chinese enterprises’ stronger competitiveness,” said Mei Xinyu, a foreign trade expert at the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce.
“More Chinese investment will flow into global infrastructure, manufacturing and so on,” Mei said.
However, Gao said that to protect the interests of Chinese enterprises in the process of going global, more legal support is necessary.
Despite criticism of China’s investment environment, Gao said foreign investment in the country has been edging up, and more of it will shift away from industry and into the service sector. The total trade in services surpassed $ 520 billion in 2013.
“Of course, we will further standardize measures on attracting investment, clarify preferential policies and promote fairer competition between foreign and domestic companies,” said Gao.
As for this year’s 8 percent growth target for foreign trade, Gao said the actual outcome will be close. Total foreign trade is predicted to climb to $4.14 trillion, which would be an increase of more than 7 percent.
“Although we are moving at a slower pace, we are playing a bigger role in the international trading markets,” said Gao.
Echoing the Chinese government’s call for adjusting the economic structure and stimulating domestic demand, which came at the annual Central Economic Work Conference earlier this month, Gao stressed that China should maintain its competitive edge in traditional industries, such as textiles, furniture, and toys.
“As China is losing its cheap labor and material costs, it is important to cultivate brands and improve the quality of our products,” Gao added.
At the same time, it is urgent for the country to create new comparative advantages in emerging industries, including water and electric power, construction equipment, high- speed rail transport and nuclear energy, according to Gao.