The People’s Daily Overseas Edition has reported an interview with Professor Yu Miaojie, a deputy of the 14th National People’s Congress and a member of the Standing Committee of the 14th People’s Congress of Liaoning Province, as well as the Deputy Secretary of the CPC Committee and President of Liaoning University. The original text and link are reproduced here.
In 2022, China’s outbound direct investment reached a flow of 163.12 billion US dollars, maintaining its leading position in the world in terms of investment scale
Reporter: Liao Ruiling
People’s Daily Overseas Edition (October 7, 2023, Page 3)
The Ministry of Commerce, National Bureau of Statistics, and State Administration of Foreign Exchange have jointly released the Statistical Bulletin on China’s Outbound Direct Investment for the Year 2022 (the Bulletin). The Bulletin comprehensively surveys China’s outbound direct investment in 2022, including the flow and stock of China’s outbound direct investment, direct investment in major economies worldwide, the composition of outbound direct investors, and the composition of outbound direct investment enterprises. According to the Bulletin, in 2022, China’s outbound direct investment reached a flow of 163.12 billion US dollars, ranking second globally, and China’s investment scale continued to maintain a leading position in the world.
China’s outbound direct investment flow ranks among the top three in the world
In Pakistan, the Thar Coalfield Power Integration Project operated by Shanghai Electric meets the electricity needs of around four million households. In Hungary, Lenovo Group has built highly automated and intelligent factory equipment, with an average production time of one server per minute. In recent years, Chinese enterprises have accelerated their pace of ‘going global’, and the investment efforts of Chinese companies overseas have continued to increase.
According to the Bulletin, China’s outbound direct investment flow has consistently ranked among the top three globally for 11 consecutive years and has accounted for over 10% of the global share for seven consecutive years. By the end of 2022, China’s outbound direct investment stock reached $2.75 trillion, ranking among the top three globally for six consecutive years.
From a specific distribution perspective, overseas enterprises cover over 80% of countries and regions worldwide. By the end of 2022, Chinese domestic investors established over 47,000 overseas enterprises in 190 countries and regions globally, with nearly 60% of them located in Asia, 13% in North America, and 10.2% in Europe. Among them, 16,000 overseas enterprises have been established in countries participating in the Belt and Road Initiative.
Yu Miaojie commented: “The continuous presence of China’s outbound direct investment flow and stock in the global forefront indicates that Chinese enterprises are continuously growing in size and strength, and they are firmly ‘going global’ by improving local infrastructure and creating a significant number of employment opportunities through project construction”. These efforts further promote trade connectivity, financial integration, and people-to-people exchanges, thereby driving global economic development.
The scope of foreign investment has become more extensive
More and more Chinese enterprises are venturing abroad and investment areas are becoming increasingly diverse. According to the Bulletin, in 2022, China’s outbound direct investment covered 18 major sectors of the national economy, with investments in sectors such as leasing and business services, manufacturing, finance, wholesale and retail, mining, transportation, etc., all exceeding 10 billion US dollars.
Yu Miaojie added: “In recent years, among Chinese enterprises going global, some have expanded their business based on the trends in overseas markets, while others have explored business development opportunities locally, leveraging their own technological advantages. The investment areas have gradually achieved full coverage across all industries and all aspects, and China’s outbound investment structure continues to be optimized”.
Green investment has become a major highlight. “In recent years, China’s outbound investment has maintained a steady expansion trend, and the quality of outbound investment has also improved, with noticeable growth momentum in the field of new energy”, said Liu Qiao, Dean of Guanghua School of Management at Peking University.
Data shows that in 2022, new energy became the sector with the highest number of foreign investment projects in the power industry, accounting for approximately 58%. Among them, there were eight solar power projects, accounting for 33% of the total, with an investment amount of 1.331 billion US dollars; and six wind power projects, accounting for 25%, with an investment amount of 519 million US dollars.
Mutually beneficial cooperation drives economic development
Chinese enterprises, in the process of ‘going global’, adhere to the principle of mutual benefit and contribute to the economic development of various countries. According to the Bulletin, in 2022, overseas enterprises paid a total of 75 billion US dollars in taxes to their host countries, an increase of 35.1%. The total number of employees of overseas enterprises exceeded 4.1 million by the end of the year, with nearly 2.5 million being foreign employees. Outbound investment in that year drove the import and export of goods, amounting to 256.6 billion US dollars. Non-financial overseas enterprises achieved sales revenue of 3.5 trillion US dollars, a growth of 14.4%.
During the 23rd China International Fair for Investment and Trade, Dorothy Tembo, Deputy Executive Director of the International Trade Centre (ITC) of the United Nations, stated: “Whether capital flows out of or into China, trade and investment will contribute to a sustainable economic recovery, promote economic development, and create more employment opportunities”.
China’s outbound investment has continued to maintain positive momentum this year (2023). Data released by the Ministry of Commerce shows that from January to August, China’s non-financial direct investment abroad reached 585.61 billion RMB, an increase of 18.8% year-on-year. Among them, Chinese enterprises made non-financial direct investment of 140.37 billion RMB in the Belt and Road countries, an increase of 22.5% year-on-year. At the same time, Chinese contracted engineering projects generated a turnover of 648.62 billion RMB, a year-on-year increase of 6.1%, and newly signed contracts amounted to 863.34 billion RMB, a year-on-year increase of 2%. Among them, Chinese enterprises’ turnover from contracted engineering projects in the Belt and Road countries reached 529.52 billion RMB, a year-on-year increase of 4.8%, and newly signed contracts amounted to 725.35 billion RMB, a year-on-year increase of 5.6%.
Yu Miaojie concluded: “To maintain the positive momentum of outbound investment, Chinese enterprises need to continuously improve their competitiveness and innovation capabilities while fulfilling their social responsibilities to promote people-to-people connectivity. Additionally, enterprises should identify their overseas targets and positioning, clarify their own advantages in ‘going global’, and promote sustainable and high-quality development of overseas businesses”.
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