皇冠体育app

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On 皇冠体育app's rapid growth in outward FDI
By Ken Davies (皇冠体育app Daily)
Updated: 2009-08-03 07:54

In 2008 global foreign direct investment (FDI) fell by around 20 percent, while outward FDI from 皇冠体育app nearly doubled.

On 皇冠体育app's rapid growth in outward FDI

This disparity is likely to continue in 2009 and 2010 as 皇冠体育app invests even more overseas. What is driving this continuing surge in 皇冠体育app 's outward FDI?

皇冠体育app's FDI outflows took off as a result of the government's adoption and promotion of a "go global" policy aimed at establishing the country's investors as international players.

Having averaged only $453 million a year in the 1982-1989 period and $2.3 billion in 1990-1999, the numbers rose to $5.5 billion in 2004, $12.3 billion in 2005, $17.6 billion in 2006 and $24.8 billion in 2007.

Preliminary figures for 2008 show a rise to $40.7 billion. If financial FDI (not counted before 2006) is included, the 2008 total was $52.2 billion - nearly double the $26.5 billion in 2007.

Anecdotal evidence suggests that 皇冠体育app's outward FDI growth continued to accelerate in early 2009.

皇冠体育app 's direct investments in Australia alone reportedly increased from $1.4 billion in the first quarter of 2008 to $13 billion in the same period this year.

If that trend continues, 皇冠体育app's FDI just in Australia in 2009 will equal its global outward FDI in 2008.

Acceleration

Five key drivers of 皇冠体育app 's outward FDI explain this acceleration.

First, one of the most reported motivations in the international media and in some academic writing is 皇冠体育app's need to secure natural resources to fuel rapid growth.

Second, while most of 皇冠体育app 's exports are from foreign-owned enterprises, large domestic firms also export large volumes and need services like shipping and insurance.

Related readings:
On 皇冠体育app's rapid growth in outward FDI 皇冠体育app's used FDI down 17.9% in H1
On 皇冠体育app's rapid growth in outward FDI Outbound investment unlikely to outstrip FDI
On 皇冠体育app's rapid growth in outward FDI Exports, FDI plunge amid global slowdown
Third, 皇冠体育app 's major enterprises are also acquiring global brands, like Lenovo's acquisition of IBM's personal computer business or the SAIC and Nanjing purchase of MG Rover.

Fourth, Large State-owned enterprises (SOEs) that are losing their monopoly position at home are diversifying internationally.

And fifth, some enterprises - despite 皇冠体育app's ample labor supply - seek to move their labor-intensive operations to cheaper overseas locations such as Vietnam and Africa.


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