China surges to 5th largest global investor

China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of US$56.5 billion, compared to a ranking of 12th in 2008, the country's Ministry of Commerce said on Sunday.

On top of this, foreign direct investment (FDI) this year was set to “surpass US$100 billion”, compared to US$90 billion last year, ministry officials predicted.

Globally, foreign investment decreased by almost 40 percent last year amid the financial downturn and is expected to show only marginal growth this year.

The growth in both outbound investment from, and inbound investment to, China reflects the nation's rising economic power and attractiveness as an investment destination.

The ministry made the announcements during a press conference held in Xiamen on the upcoming United Nations Conference on Trade and Development (UNCTAD) World Investment Forum and the 14th China International Fair for Investment and Trade. Both forums will start on Tuesday.

According to the ministry, China's ODI grew by 1.1 percent from a year earlier to US$56.53 billion, which includes investment of US$47.8 billion in non-financial sectors worldwide, up 14.2 percent year-on-year.

Last year was the eighth consecutive year that the nation's ODI had grown. In this period the average annual growth rate stood at more than 50 percent.

“China is now the fifth largest investing nation worldwide, and the largest among the developing nations,” said Shen Danyang, vice-director of the ministry's press department.

In 2009, global ODI volume reached US$1.1 trillion, and China contributed about 5.1 percent of the total.

But “this is just a beginning.” Although the figure is already “quite amazing,” the volume is “not large enough” considering China's economic growth and local companies' expanding demand for international opportunities, Shen said.

“The growth rate (for ODI) in the next few years will be much higher than previous years,” Shen said, without elaborating.

China's ODI growth witnessed strong momentum this year. From January to June, the ODI in financial sectors was up by 43.9 percent to US$17.84 billion, and in July alone, the ODI recorded US$8.91 billion, the highest this year.

Liu Zuozhang, director of the investment promotion agency under the commerce ministry, told China Daily that China's ODI in non-financial sectors would probably grow to US$60 billion this year.

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