Official Comments on China’s outward investment and economic cooperation & foreign investment in China (1–11,2015)

by+Flora+Zhao

Chinas Outward Investment and Economic Cooperation

In January - November 2015， Chinas outward investment and cooperation maintained a sound development momentum. The direct investment overseas maintained a rapid growth of double digit rates， and is expected to surpass the growth goal of the whole year by 10%. The construction of overseas economic and trade cooperation zones， infrastructure construction and foreign contract projects showed their own remarkable strength. The number of large scale projects increased obviously. China has entered into the stage of capital export and industry export. All of these strongly supported the construction of “Belt and Road” and the international capacity cooperation. Official from the Department of Outward Investment and Economic Cooperation of MOFCOM pointed out that Chinas outward investment and economic cooperation in January-October has the following characteristics：

● Direct Investment overseas saw rapid growth and the industrial patterns were constantly optimized.

Firstly， the growth was rapid. In January-November， the nonfinancial direct investment overseas reached US$ 104.13 billion， up 16% year on year. Secondly， the scale for the covered sectors was wide. The direct investment overseas covered almost all the industries of the national economy. Thirdly， the growth of manufacturing industry was rapid. The investment flew to the manufacturing industry was US$ 11.8 billion， up 95.4% year on year. Among these， the investment flew to the equipment manufacturing industry was US$ 5.89 billion， up 117.3% year on year. Fourthly， the construction of overseas economic and trade cooperation zone became the highlight. At present， there are 75 cooperation zones in total whose construction the Chinese enterprises are promoting， driving the investment by almost US$ 18 billion， and attracting about 1，141 enterprises to enter in to the zones. The cooperation zones are distributed in 34 countries， 21 of which are SCO members.

● Infrastructure construction became the highlight of cooperation with large scale projects increasing obviously.

In January-November， the newly signed contract value of Chinas foreign contract projects reached US$ 163.03 billion， up 1.3% year on year； Chinas foreign contract projects have gained breakthrough in transportation， electric power projects and communication engineering with the newly signed contracts reaching US$ 92.1 billion， accounting for about 60% of the total of the newly signed contracts. Among these， 342 projects were over 100 million， 40 more than that of the same period of last year.endprint

● Bilateral cooperation gained practical promotion， and the growth of regional and country projects was strong.

In January-November， Chinas direct investment to ASEAN was US$ 9.13 billion， up 109.9% year on year； 1，381 contract projects were newly signed with the contract value US$ 28.4 billion， up 41.2% year on year. The direct invest- ment to the U.S. hit the new record， with the value reaching US$ 7.187 billion， up 54.9% year on year. Investment to SCO was US$ 2.71 billion， up 37.6% year on year. The contract value of the newly signed contract projects with Oceania was US$ 2.53 billion， up 73.3%， and that with Angola was US$ 8.57 billion， 3.6 times that of the same period of last year.

He also pointed out that， in the first eleven months of this year， Chinas outward investment and cooperation has a sound overall situation， which was mainly attributed to the following factors：

Firstly， the leading role of the “Belt and Road Initiative” was prominent. With the continuous promoting of the “Belt and Road Initiative”， more and more countries expressed their strong wills for strengthening investment and cooperation with China. In the first 11 months， the Chinese enterprises have made direct investment to 49 countries along the “Belt and Road”， with the investment volume totaling US$ 14.01 billion， up 35.3% year on year. In the same period， Chinese enterprises signed 2，998 contracts of foreign contract projects with 60 countries along the “Belt and Road”， with the contract value reaching US$ 71.63 billion， accounting for 43.9% of the total newly signed contract volume of foreign contract projects， up 11.2% year on year. The accomplished turnover reached US$ 57.33 billion， accounting for 44.1% of the total of the same period， up 6.4% year on year.

Secondly， the international capacity cooperation was accelerated. With the optimizing of Chinas industrialization， the accelerating of the industrialization of developing countries and the reindustrialization of developed countries， the integration of Chinas economy with the economy of other countries was even closer. Even more Chinese capital， technology and equipment entered into the international market. In the first 11 months， Chinas international capacity cooperation enjoyed a strong growth. The export value of the large-sized complete sets of equipment was up 10% year on year. The direct outward investment of the manufacturing industry reached US$ 11.8 billion， up 95.4% year on year， accounting for 11.33% of the total outward investment in the same period.endprint

Thirdly， the enterprises were active in transformation and upgrading. Affected by the cost raise of domestic production factors， the enterprises will for going out was even stronger. The enterprises were transforming and upgrading actively through various outward investment and cooperation. Outward investment has developed from setting trading companies overseas to getting integrated in international innovation network， setting R&D centers overseas or carrying out investment in high and new technology and advanced manufacturing through M&A. Foreign contract projects have broadened from civil construction to the fields of high value added like engineering procurement construction， project financing， designing consultation and operation maintenance and management. All of these have become the new engine of the rapid development of outward investment and cooperation.

Fourthly， business environment has been optimizing. The Ministry of Commerce （MOFCOM） constantly promoted outward investment facilitation and carried out the management mode of filing. MOFCOM actively built the platform for outward investment and cooperation， and signed related agreements with the countries. MOFCOM practically promoted major projects， and conducted the construction of industrial partner， outward economic and trade cooperation zone， infrastructure construction and connectivity with related countries. MOFCOM also strengthened investment and financing support and implemented the policies like preferential credit， project financing and export insurance. MOFCOM optimized the public service platform of going out， providing heart to heart services to the enterprises. MOFCOM also strengthened the risk prevention abroad， in order to safeguard Chinas interest overseas.

Foreign Investment in China

In January - November 2015， the foreign investment in China enjoyed a steady growth. Official from the Department of Foreign Investment Administration of MOFCOM pointed out that the foreign investment in China in JanuaryNovember took on the following characteristics：

● The overall scale of foreign in- vestment in China maintained steady growth. In January - November， there were a total of 23，648 newly-established foreign-invested enterprises approved nationwide， up 11% year on year； the actually utilized FDI registered RMB 704.33 billion （equivalent to US$114.04 billion）， going up 7.9% year on year. In November， a total of 2，626 newlyestablished foreign-invested enterprises were approved， up 27.7% year on year； the actually utilized FDI registered RMB 64.9 billion （equivalent to US$ 10.36 billion）， up 1.9% year on year.endprint

● The industrial structures were further optimized. In January - November， the actually utilized FDI in service sector amounted to US$ 69.58 billion， up 18.8% year on year， taking up 61% of the national total. Among these， the actually utilized FDI in hi-tech service sector registered US$ 7.23 billion， up 51.7% year on year， in which digital content and related service， information technology service， and R&D and design service stood out with a growth of 85.9%， 55.1% and 29.7% respectively year on year. The actually utilized FDI in manufacturing industry registered US$ 35.84 billion， down 0.2% year on year， taking up 31.4% of the national total. Among these， the actually utilized FDI in hi-tech manufacturing amounted to US$ 8.54 billion， up 11.7% year on year， taking up 23.8% of the total manufacturing， and those in Biological pharmaceutical manufacturing， communications equipment manufacturing and electronic components manufacturing increased 366.3%， 142.6% and 18.6% respectively year on year.

● The sources of foreign investment maintained steady. The investment from ASEAN， EU， countries along the “Belt and Road”， Hong Kong and Macao increased 13.1%， 6.9%， 16.2%， 11.1% and 55% respectively while those from Japan， US and Taiwan province decreased 25.3%， 2.2% and 18.2% respectively.

● Foreign Investment in eastern China maintained a good momentum. With the constantly deepening of pilot free trade zones， in January - November， the actually utilized FDI in eastern China registered US$ 97.42 billion， going up 10% year on year. A total of 10， 811 newly-established enterprises within Yangtze river economic belt zone were approved， up 7.7% year on year， taking up 45.7% of the national total.

● Patterns of foreign investment utilization were constantly innovated， and the foreign M&A was active. In January - November， the number of newlyestablished foreign-invested enterprises by M&A reached 1，265 and the actually utilized FDI registered US$ 16.82 billion， going up 16.1% and 181% respectively year on year. The percentage that M&A takes up among the national total of the actually utilized FDI in January - November has risen to 14.7% from 5.6%.endprint