China’s ODI

June 18th, 2016 by admin Leave a reply »

ChinaThere was a 32 percent increase in investment in the Belt and Road project in Beijing from Chinese firms, in the first four months of 2016.  According to  Xinhua a staggering $4.9 billion was invested during this time period. The goal of this project is the establishment of an “economic corridor,” linking China and Central Asia with Europe in a “21st century reprise of the ancient caravan routes.” Furthermore, the Ministry of Commerce reported that between January and April 2016, there was an escalation of 71.8 percent in ODI, reaching 391.5 billion yuan (about 60.1 billion US dollars). Likewise in the service sector there was an increase of 73.2% to $43.8billion.

China has been intensifying its presence in the worldwide economy in recent years.  When analyzing this trend, it is paramount to look at the country’ ODI since that can be what is needed to bolster growth.  To date it has comprised investment in M&As and start-ups and growth is anticipated from around $744 billion to around $2 trillion by 2020 (currently the leader in ODI in the world is America with $4.92 trillion). Due to European economic devastation, this ODI was met with an incredible reception throughout Europe, most notably UK, France and Germany which has reaped the most benefits from Chinese funding in the last few years.

It should be noted though that FDI has also played a significant role in China’s success, turning the region into “one of the world’s biggest cross-border investors.”  According to figures from the Commerce Industry, there was an increase of 4.8 percent in the first quarter from 2015 year-on-year to 286.78 billion yuan ($45.3 billion).

So together with its FDI, China is fast becoming a leader in the global economy.  As Bill Gates said recently in an interview with Xinhua “China is going to be contributing more and more to the world’s innovation.”


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