China which recently emerged as the world's second largest economy has now become the fifth biggest global investor even as Foreign Direct Investment into the country is set to cross $100 billion this year.
Bucking international trends in both outbound and inward investments, China stepped up its outbound direct investment to $56.5 billion, jumping from 12th position in 2008 to fifth in 2009, read the Chinese Commerce Ministry figures.
On top of this, foreign direct investment in the country this year was set to surpass $100 billion compared to $90 billion last year, Shen Danyang, vice-director of the ministry told official China Daily on Monday.
The interesting trend about Chinese ODI is that Chinese enterprises, mostly state owned were focussing on developed nations and emerging markets.
During the first half of the year, China's ODI to the United States and the European Union rocketed by 360 per cent and 107.2 per cent, respectively year-on-year basis.
Its' investment into ASEAN and Russia grew by 125.7 per cent and 58.5 per cent. Jinny Yan, economist from Standard Chartered Bank, Shanghai, predicted that the EU would continue to be a hotspot for China's outbound investment in the coming months, thanks to the ongoing European debt woes.
Broadly, foreign investment world over decreased by almost 40 per cent last year amid the financial downturn, and is expected to show only marginal growth this year.
The growth in both outbound investment from and inbound investment to China reflects the nation's rising economic power and attractiveness as an investment destination, Shen said.
According to him China's ODI grew by 1.1 per cent from a year earlier to $56.53 billion, which includes investment of $47.8 billion in non-financial sectors worldwide, up 14.2 per cent year-on-year.
Last year was the eighth consecutive year for Chinas ODI growth.
"China is now the fifth largest investing nation worldwide, and the largest among the developing nations," he said.
In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.
This is just a beginning. Although the figure is already quite amazing, the volume is not large enough considering China's economic growth and local companies' expanding demand for international opportunities, Shen said.
Liu Zuozhang, director of the investment promotion agency under the commerce ministry, said China's ODI in non- financial sectors would probably grow to $$60 billion this year.
