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China’s ODI set to surpass US$1t
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CHINA’S outbound direct investment is expected to surpass US$1 trillion for the first time in 2015, as slowing economic growth and rising internationalization of Chinese business see more local companies investing overseas.
Total direct investment offshore rose to just under US$883 billion in 2014, Zhang Xiangchen, deputy China international trade representative at the Ministry of Commerce, said yesterday.
The ministry on Wednesday said that non-financial ODI rose 18.2 percent to 473.4 billion yuan (US$77 billion) in the first eight months of the year.
The ministry yesterday also revised up its 2014 offshore non-financial direct investment tally to US$107.2 billion from the US$102.9 billion reported previously, taking total outward investment for the year to US$123.12 billion.
“Our outbound investment has maintained a double-digit growth rate, and this trend will be sustained in future,” Zhang told a media briefing.
China’s slowing economy and market volatility is driving domestic firms to buy foreign brands and technology, as well as diversifying, said Thilo Hanesmann, research director at Rhodium Group in New York.
The government has unveiled policies to support the global efforts of Chinese companies, offering financial incentives and removing administrative controls on offshore deals.
Chinese firms have already announced or completed 390 deals worth US$77 billion in the year to Wednesday, according to Thomson Reuters data, a doubling of the deal amount for the same period of last year.
China’s global M&A deal volume this year has already surpassed the US$70.4 billion in 2008, formerly the biggest year so far for offshore mergers.
Industrial deals were the biggest transactions, led by China National Chemical Corp’s buyout of Italian tire maker Pirelli for US$8.88 billion, which included Pirelli’s debt.
Many of this year’s big-ticket deals were done by Chinese firms buying financial services assets, including HNA Group Co’s subsidiary Bohai Leasing Co, which paid US$2.56 billion for aviation leasing firm Avolon Holdings Ltd.
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