Trade min­is­ter up­beat on fast-grow­ing ODI

China Daily (Hong Kong) - - FRONT PAGE - By YAO JING yao­jing@chi­

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.

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