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‘Belt and Road’ plan drives China’s ODI to rise 16.3% in first 10 months
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CHINA’S overseas nonfinancial investment during the first 10 months of 2015 surged 16.3 percent year on year, hailed by many as a stabilizer of world economic growth.
The mainland made around 589.2 billion yuan (US$92.5 billion) in outbound direct investment during the period, covering 5,553 companies across 152 countries and regions, data released by the Ministry of Commerce showed yesterday.
ODI projects covered a wide range of fields including transport, residential construction, electric power engineering, telecommunication and petrochemical industries.
“The China-proposed ‘Belt and Road’ initiative, designed to improve transnational connections via transport networks, contributed a lot to the ODI increase,” said Zhang Shuyu, a researcher with the University of International Business and Economics.
In the first 10 months, ODI in 49 nations along the Belt and Road totaled US$13.17 billion, up 36.7 percent year on year. Top investment spots were Singapore, Kazakhstan, Laos, Indonesia and Russia.
Meanwhile, new foreign-contracted projects in 60 countries along the route rose to US$64.55 billion, up 21.6 percent from last year, accounting for 43.3 percent of China’s overseas projects.
The distribution of surplus industrial equipment to countries in need, waning domestic profits fueling a desire to expand overseas, and the slashing of red tape have combined to make China the world’s top capital exporter, said Jiang Wenbin, deputy head of the ministry’s department of outward investment and economic cooperation.
China became a net capital exporter for the first time last year, when ODI surpassed foreign direct investment. ODI grew 14.1 percent in 2014, eclipsing the 1.7 percent growth for FDI.
Growing confidence
“The ODI data provide fresh evidence that President Xi Jinping’s remarks are not baseless,” said Zhang, referring to comments by the president on Sunday that China had the confidence and capability to maintain medium-high growth.
When addressing the G20 summit in Antalya in Turkey, Xi said China’s confidence comes from its determination and commitment to press ahead with reform and build an open economic system.
China’s 13th Five-year (2016-2020) Plan has set the target of maintaining medium-high growth. While no official targets have been released, Xi said previously that annual growth of 6.5 percent would be required for China to achieve the target of doubling 2010 GDP and per capita income of both urban and rural residents by 2020, and complete the building of a moderately prosperous society.
China is still a major world economic powerhouse given the economy contributes 30 percent to world growth despite growth slowing to 6.9 percent year on year in the first three quarters.
“China’s growth potential is huge in sectors including consumption and green industries,” Zhang said, citing the substantial number of online transactions totaling 91.2 billion yuan, an increase of 60 percent from last year, on Singles Day, the November 11 equivalent of the American Cyber Monday.
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