China’s outbound direct investment (ODI) is expected to continue rising in the second half of 2023. Despite facing an adverse external environment, the country’s non-financial ODI rose 22.7% year-on-year to CNY431.61 billion in the first half of the year, according to the Ministry of Commerce (MOFCOM). The growth of China’s ODI will be driven by domestic companies’ improved ODI structure, with investment notably flowing into sectors including manufacturing, logistics and retail, said Bai Ming, Deputy Director of international market research at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.
China’s ongoing efforts to expand its institutional opening-up and seal high-standard economic and free trade deals, coupled with the rapid growth of its tech-intensive green product industries, are expected to drive Chinese companies – particularly those in the private sector – to strategically invest in establishing new plants and innovation facilities in overseas markets, said Wang Bijun, Associate Researcher at the Chinese Academy of Social Sciences’ Institute of World Economics and Politics in Beijing. These efforts will also encourage domestic companies to build a strong presence through new partnerships and merger and acquisition (M&A) activities in other parts of the world, particularly in developed markets, Wang said. For example, Chinese electric vehicle battery manufacturer Contemporary Amperex Technology Co (CATL) said recently that it is in talks with a European partner regarding the establishment of multiple EV battery recycling stations across Europe. “We are looking at setting up recycling sites – not just one, but a number of them – in Europe,” said Ni Jun, Chief Manufacturing Officer of the private company based in Fujian province. Ni added that the company is also looking for partners in North America.
Guo Tingting, Vice Minister of Commerce, said that China’s cooperation with other countries will continue to expand, particular in the green, digital and blue economy. China has signed 41 investment cooperation memorandums, spanning a wide range of sectors, with different countries this year, Guo added.
Yang Tao, Director General of the Ministry of Commerce’s Comprehensive Affairs Department, said that apart from developing infrastructure projects such as railroads, hospitals, power plants, and bulk and container ports, China’s ODI has been a catalyst for growth in diverse sectors internationally. The dynamic investment approach of Chinese companies has fostered significant progress in areas such as trade in services, new foreign trade formats, and digital and green growth on a global scale, Yang said. These moves will help drive economies and job markets in many countries this year, he emphasized, as reported by the China Daily.
