China is the fifth country for foreign direct investments

September, 2011

The UNCTAD report on foreign direct investments ranks China at the top of the ranking of investor countries, confirming the transformation of the country, from target to promoter of the phenomenon.

Figures released by the United Nations Conference on Trade and Development (UNCTAD) in the document “World Investment Report 2011” say the role of China as a leading country in direct investment abroad.According to the charts contained in the report in question, built based on data updated to 2010, in fact, China was ranked fifth among the countries that make foreign direct investment, ranking even before Japan and the United Kingdom. In particular, the preferred destinations for Chinese investments turn out to be the United States (33% of gross domestic product), the countries of East Asia (21% of gross domestic product) and developing economies (15.7% of gross domestic product). The ODI index (Overseas Direct Investment) for China in 2010 seems to have grown by 17% compared to the figure for 2009, reaching $ 68 billion (note that, on this information, data released by the Ministry of Commerce of China are discrepant and detect a 36% increase).
“If we consider the prospect of steadily rising gross domestic product, foreign direct investment from China have enormous potential for growth”

James X. Zhan

Director Investment and Enterprise Division at Unctad

From a target country for foreign direct investment, China is, therefore, moving towards the consolidation of its role as a leading investor. Many analysts believe even that it is a phenomenon that has just started and, as such, still has wide margins for improvement. In this regard, the Director of Investment and Enterprise Division of UNCTAD, James X. Zhan, said that "if we consider the prospect of steady gross domestic product growth, the Chinese ODI has a huge potential for growth". This fact is of special importance especially in the current economic and financial crisis, whose effects are felt by heavily on advanced economies of Western countries: financial assets of China could, in fact, play an important role in shaping the new geography of world economic powers. The Dragon, however, must not neglect to monitor the level of its debt, which is increasing mainly due to the share attributable to the management of local governments. This seems to have begun to raise the attention of the Beijing government, which recently revised the priorities to be assigned to various areas in which to invest .