China surges to 5th largest global investor

Fan Chunyong, standing deputy chief of the China Industrial Overseas Development and Planning Association, said the challenge would not affect the upward trend of the ODI.

“China's ODI will go up to US$100 billion in 2013, and the Chinese accumulative overseas investment will reach US$500 billion by then,” said Fan.

According to the ministry, by the end of 2009, 13,000 Chinese enterprises had invested in 177 nations and regions worldwide, and the largest volume of funds went to the Asia-Pacific region. Europe and Africa ranked second and third in absorbing Chinese investment.

Figures also revealed that more Chinese enterprises were focused on developed nations and emerging markets. During the first half of the year, China's ODI to the United States and the European Union rocketed by 360 percent and 107.2 percent respectively year-on-year. And investment into ASEAN and Russia grew by 125.7 percent and 58.5 percent.

Jinny Yan, economist from Standard Chartered Shanghai, predicted that the EU would continue to be a hotspot for China's outbound investment in the coming months thanks to the ongoing European debt woes.

As for FDI, Shen predicted it would reach a record high of US$100 billion this year as China's consumption capacity gradually picked up and the nation's efforts on creating an open and transparent investment environment paid off.

Responding to recent complaints by foreign businesses on the “worsening” investment environment, he said it “highlights foreign businesses are attaching more importance to the Chinese market.”

A report by the European Chamber of Commerce released last Thursday said China had made progress on improving its investment environment, but still needed to do more, especially on market access and the regulatory environment.

While global FDI slumped by almost 40 percent last year, China's FDI was down by a mere 2.6 percent, according to the UNCTAD. China remained the second largest recipient nation of FDI, following the U.S.

During the first seven months, China's FDI increased by 20.7 percent to US$58.35 billion, and FDI in July surged by 29 percent.

Zhan Xiaoning, director of the investment and enterprise division under the UNCTAD, said China was taking the leading role in the FDI recovery worldwide, even though FDI growth was not a cause for optimism globally.

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