Edited by Shirley

Foreign Investment in China

China’s input of foreign investment in January-November has the following characteristics:

The national overall absorption of FDI was stable. In January-November, a total of 24,355 newly-established foreign-invested enterprises were approved, going up 3.0% year on year. The actually utilized FDI amounted to RMB731.8 billion (US$113.79 billion), up 3.9% year on year ( with data of bank, insurance and security excluded).

The absorption of FDI in service sector maintained a growth and that in hi-tech service stood out. In January-November, the actually utilized FDI in service sector was RMB513.3 billion, up 8% year on year. Among them, those in computer application service sector, distribution service sector, and information and consulting service sector grew up 123%, 51.2% and 71.9% respectively year on year. The actually utilized FDI in high-tech service sector amounted to RMB88.14 billion, up 97.7% year on year.

The actually utilized FDI in pharmaceutical industry and general equipment manufacturing industry grew up 65.3% and 16.6% year on year respectively. That in hi-tech manufacturing was RMB54.73 billion, up 3.6% year on year.

The actually utilized FDI in agriculture, forestry, husbandry and fishery amounted to RMB11.6 billion, up 32.9% year on year.

The investment from US and EU maintained a robust momentum of increase. In January-November, the actual input of the investment from US and EU grew up 55.4% and 43.9% respectively year on year. Among 28 EU 28 EU countries including UK, Germany, Luxembourg and Sweden stood out with a growth of 120.2%, 87.2%, 128.8% and 48.1% respectively year on year. Among those from Asian region, the actual input from Macao and ROK grew up 295.6% and 23.6% respectively year on year.

The absorption of foreign FDI in western China continued to grow and that in eastern China remaintained steady. In January-November, the actually utilized FDI in western China and eastern China amounted to RMB 53.45 billion and RMB637.97 billion respectively, going up 23.7% and 6% respectively year on year.

The actual use of foreign capital by foreign M&A continued to increase. In January-November, a total of 1,099 newly-established foreign-invested enterprises were approved with an actual use of foreign capital RMB 123.5 billion, up 15.6% year on year, taking up 4.5% and 16.9% respectively of their total figures.

Outward Investment and Economic Cooperation

In January-November 2016, China’s outward investment cooperation maintained a rapid development situation. China’s domestic investors conducted non-financial direct investment in more than 7,500 overseas enterprises in 164 countries and regions in the world with an accumulative investment value of RMB1.06963 trillion, equivalent to US$161.7 billion, with an increase of 55.3%. The newly-signed contract value of contractual foreign projects was RMB1.27317 trillion, equivalent to US$192.47 billion, with an increase of 18.1%. The completed turnover was RMB874.62 billion, equivalent to US$132.22 billion, with an increase of 1.6%. At the end of November, the number China’s outward laborers reached more than 990,000. In January-November, China’s outward investment cooperation mainly showed the following features:

Outward investment cooperation continued to increase rapidly. In November, China’s foreign direct investment reached US$15.74 billion, with an increase of 76.5%. The newly-signed contract value reached US$26.95 billion, with an increase of 91%.

The field of investment and merger and acquisition was extensive. According to preliminary statistics, in January-November, Chinese overseas merger and acquisition projects numbered 561, with a transaction amount of US$82.4 billion (including overseas financing), involving almost all industries of national economy. Among these, manufacturing industry ranked the first by almost US$23-billion merger and acquisition amount.

Local enterprises’ foreign direct investment accounted for almost 90%. In January-November, the non-financial foreign direct investment of local enterprises reached US$141.84 billion, 2.1 times over that at the same period last year, accounting for 87.7% of the total value of foreign direct investment in the same period. Shanghai, Guangdong and Beijing are on the top of the list of the local outward investment.

The outward investment of information transmission / software and information technology service industry, and manufacturing industry enjoyed rapid development. In January-November, outward investment mainly flew to the following fields: business service industry, US$40.33 billion, with an increase of 8.1%, accounting for 24.9% of the total investment; manufacturing industry, US$29.73 billion, with an increase of 151.9%, accounting for 18.4%, equipment manufacturing industry US$16.76 billion, 2.8 times over the number in the same period last year, accounting for 56.4% of the outward investment of manufacturing industry; wholesale and Retail Sale Trade industry, US$26.31 billion, with an increase of 95.8%, accounting for 16.3%; information transmission, software and information technology service industry, US$19.23 billion, with an increase of 249.9%, accounting for 11.9%.

The business of contractual project in the relevant countries of the “Belt and Road” has enjoyed rapid development. In January-November, the newly-signed contractual foreign projects in the relevant countries of the “Belt and Road” by Chinese enterprises reached 7,367, with a contractual amount of US$100.36 billion and an increase of 40.1% year on year, accounting for 52.1% of the newly-signed contractual value of China’s contractual foreign projects in the same period. The completed turnover was US$61.63 billion, with an increase of 7.5% year on year, accounting for 46.6% of the total amount in the same period.

China’s investment in Africa since this year 

According to the prediction of African Development Bank, in 2016 the economy of Africa has increased 1.8%, marking the lowest number for almost 20 years. However, the overall economic situation of Africa doesn’t impede China’s rapid development step of investing in Africa. According to the statistics of the MOFCOM, in January-October, the non-financial direct investment flow of Chinese enterprises to Africa increased 31% greatly and the amount exceeded US$2.5 billion. Under the current complex and changing international economic situation, this performance is valuable, because it not only embodies firm confidence of Chinese enterprises in African market, but also indicates China’s strong risk-handling capability and development resilience in investment cooperation with Africa.

Under the guidance of the initiative of China-Africa Ten Cooperation Plans proposed by President Xi Jinping at the Johannesburg Summit of China-Africa Cooperation Forum in 2015, the investment of Chinese enterprises in Africa mainly showed three features. Firstly, the non-financial direct investment flow to countries such as Kenya and Uganda has fast economic growth increase by more than 100% year on year. Secondly, the first-stage construction of the expansion area of the trade and economic cooperation area of Egypt and Suez has been officially started and there have been more than 10 famous international enterprises expressing the interests of investing and staring business in the park. The platform role and leverage effects of trade and economic cooperation zones such as industrial parks and zones have further come out. Thirdly, the proportion of manufacturing industry exceeded 10%.

Next, Chinese government will continue to take the China-Africa “Ten Cooperation Plans” as the key, continue to unswervingly promote trade and economic cooperation between China and Africa, encourage and support strong and reputable Chinese enterprise to invest and start business in Africa as always, and constantly improve policy and information service. Meanwhile, we hope that Africa can provide favorable investment and business environment for Chinese enterprises.

(Source: Ministry of Commerce of the People’s Republic of China)