Follow-Up: Money From China?
A post earlier this month dealt with increasing outbound investment from China. The occasion was a talk by Shanghai lawyer David Mao, who predicted that China’s outbound direct investment would soon surpass $90 billion a year.
Where Are They Going Next?
The October 28 issue of the South China Morning Post carries an article with what may prove to be confirmation. Chinese firms nearly doubled their investments outside of China in the third quarter of 2009 (July through September). For the quarter, they invested $20.47 billion in other markets, a spectacular 190% increase over the same quarter a year ago. Chinese outbound investment was only $12.4 billion for the first half of 2009, so the third quarter performance raised the total for nine months to $32.87 billion. That’s quite an acceleration. At this pace, Mao’s prediction should come true in 2010.
State-owned firms, especially, have ready access to foreign exchange and are being encouraged by Beijing to invest overseas. Outbound investments in 2009 have been made in 112 countries and have emphasized resource acquisition, as well as banking and other financial services. Commentators interviewed by SCMP said such outbound investment could continue for years, perhaps a decade or longer.
