Reposing faith in globalization
Chinese investments surge in BRI countries, helping pandemic-hit economies
China’s nonfinancial outbound direct investment in 58 countries participating in the Belt and Road Initiative rose 18.3 percent to $17.79 billion in 2020 despite a 0.4 percent fall in the overall nonfinancial ODI to $110.15 billion, the Ministry of Commerce said on Jan 21.
Nonfinancial ODI into the BRIinvolved economies accounted for 16.2 percent of the total nonfinancial ODI in 2020, up 2.6 percentage points from a year earlier, said Gao Feng, a spokesman for the ministry.
Contracts for new projects in the BRI-related economies amounted to $141.46 billion, accounting for 55.4 percent of the total amount last year.
Though the overall ODI reached $132.94 billion last year, up by 3.3 percent on a yearly basis, the ODI into some sectors saw faster growth than others. These sectors included leasing and commercial services, wholesale and retail, scientific research and technical services, and power production and supply.
In 2020, ODI in the leasing and business services industry rose by 17.5 percent on a yearly basis to $41.79 billion. ODI in the wholesale and retail sector was $16.07 billion, a year-onyear increase of 27.8 percent.
Investment into power production and supply, and scientific research and technical services increased 10.3 percent and 18.1 percent, respectively, in the same period.
Nonfinancial ODI from local enterprises rose 16.4 percent on a yearly basis to $80.75 billion last year.
Looking at the data for last year, it is obvious that Chinese enterprises continued to repose immense faith in globalization and played a significant role in the recipient countries’ development and global economic recovery from the COVID-19 pandemic, experts said.
“Companies from China are now more confident and willing to invest abroad, thanks to the country’s proactive globalization strides,” said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
Despite the rising protectionism and anti-globalization disruptions in recent years, Chinese enterprises are still committed to overseas investment and international economic and trade cooperation, as they have witnessed the protection and enhancement of global economic and trade order due to globalization, Zhou said.
Through overseas investment and participation in international competitions and resource allocation, Chinese enterprises have optimized their business operations and presence globally to boost their performance and capabilities, he said, adding that free-trade agreements inked by the Chinese government have played a key role in spurring the go-global efforts of Chinese companies.
The pandemic has severely impacted international industrial and supply chains. Thanks to the country’s effective control measures, Chinese enterprises have resumed business activities and recovered from the COVID-19 effect rather quickly and are able to meet the demand from other regions in the world as planned.
Through new investment, Chinese enterprises furthered employment, tax and exports overseas and also provided the impetus for local economic recovery and development, Zhou said.
Bai Ming, deputy director of the Institute of International Market Research at the CAITEC, said the higher investment in BRI-related countries demonstrates the deepening economic and trade cooperation between China and those countries, which will contribute to global economic recovery.