Shanghai's investors take lead global role
By Wang Yanlin |
February 23, 2010, Tuesday
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Print Edition
Print Edition
SHANGHAI'S economic ride is showing no sign of entering the slow lane.
The latest set of bullish statistics shows the city approved 20 projects abroad last month, the value of which increased nearly sixfold from a year earlier to US$239.5 million.
The Shanghai Commission of Commerce released the figures yesterday and signaled there may be more upside.
"The surge in the city's non-financial outbound investment benefits from a strengthened recovery in both the Chinese and global economy," the commission said in a statement.
"Such a good beginning to the year lays a solid foundation for future increases."
Private companies accounted for 45 percent of the total number of investors with their funds making up 12.7 percent of the total.
Bargain deals
State-owned enterprises, although their numbers were only 25 percent of the basket, accounted for 79.1 percent of the total. Foreign companies based in Shanghai made up the rest.
Shanghai's outbound investments soared 117 percent annually to US$1.54 billion in 2009 when the global economy tumbled amid the financial crisis and presented many bargain opportunities.
City firms should tap into emerging markets this year, Sha Hailin, head of the commission, said this month.
Li Maoyu, an analyst at Changjiang Securities Co, said the enthusiasm among domestic investors in going abroad for opportunities may continue for the long term.
"The demand is boosted by the relatively low price of overseas projects at the moment after the global financial crisis," Li said.
Lead role
"Also, Chinese investors are eager to learn from foreign practices, hoping it can facilitate their businesses in China."
Shanghai investors were taking the lead in this rush of outbound investment.
About 75 percent of outbound investment in the city flowed to Europe in January, with a value of US$179.5 million. It was followed by Asia, accounting for 20.4 percent of the total.
Real estate proved "hot property" among Shanghai investors, with US$178 million going to the sector.
The manufacturing industry, however, attracted just US$16.8 million.
With the surge in outbound investment, the number of Shanghai people sent to work overseas also climbed 241 percent to 1,737 last month, according to the commission.
Chinese investors spent US$2.36 billion last month in 420 overseas companies. The projects covered 75 countries, according to the Ministry of Commerce.
Foreign direct investment in China had a good start, up 7.79 percent year on year to US$8.13 billion in January.
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