China becomes world’s second-largest source of outward FDI

China rose to the position of the second-largest source of outward foreign direct investment (FDI) for the first time in 2016.

FDI outflows from China increased 44 percent year on year to 183 billion U.S. dollars last year, driven by a surge in cross-border mergers and acquisitions by Chinese firms, according to the World Investment Report 2017.

The report was jointly released by the United Nations Conference on Trade and Development (UNCTAD) and the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

The United States remained the largest investor worldwide, while the Netherlands ranked third.

In 2016, China’s FDI outflows were 36 percent more than the amount of its inflows, according to the report.

The country remained the largest investor in the least developed countries, far ahead of France and the United States.

Despite a 15-percent decline in FDI inflows to developing Asia, China remained the third-largest recipient of FDI in 2016, behind the United States and Britain, with inflows falling 1 percent year on year to 134 billion dollars.

James Zhan, director of UNCTAD’s investment and enterprise division, said China’s outward investment will stay at a high level as the country pushes forward Belt and Road development and international industrial capacity cooperation.

However, the country’s outbound investment needs an improvement in quality and may face challenges from protectionism, Zhan cautioned.

Globally, FDI flows dropped 2 percent to 1.75 trillion dollars in 2016, according to the report.

It predicted a modest recovery in global FDI flows for 2017, expecting them to increase 5 percent to 1.8 trillion dollars.

Source: XINHUANET

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