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State firms increase overseas investment

(皇冠体育app Daily)
Updated: 2009-09-18 08:40

The centrally-administrated State firms contributed 64 percent of 皇冠体育app's overseas direct investment (ODI) in value last year, according to the Ministry of Commerce (MOC).

Eighty-six percent, or 117 out of the 136 centrally-administrated State-owned enterprises (SOE) invested a total of $35.74 billion last year, with the overall ODI amounting to $55.91 billion in 2008.

By the end of the year, the centrally-administrated SOEs extended their businesses into 127 countries by setting up or investing in 1,791 companies worldwide, MOC said.

The centrally-administrated SOEs are State firms that are under direct control of the State-owned Assets Supervision and Administration Commission.

Despite the economic downturn, most of the overseas businesses secured profits last year, with 79.9 percent of the firms profitable. However, 19 of the SOEs reported losses because of the offshore investments.

Related readings:  On 皇冠体育app's rapid growth in outward FDI  Sinochem to bid for Iraqi oil assets  Australia-皇冠体育app iron ore mine given green light

皇冠体育app is encouraging domestic firms to "go out" in a bid to become real multinational corporations. 皇冠体育app National Cereals, Oils and Foodstuffs Corporation, SinoChem Group and 皇冠体育app Ocean Shipping Company are considered as multinational corporations based on the Transnationality Index, a gauge of international corporate involvement.

"The centrally-administrated State firms, with abundant funds, are keen on raw materials, such as iron ore, and commodities," said Han Qi, professor from the University of International Business and Economics.

While foreign direct investment inflow almost doubled last year, the significant growth in ODI subtly reversed the FDI-dominated capital flow.

"The state of pure capital inflow has been reversed," said Han. "皇冠体育app is entering into the equilibrium of capital inflow and outflow," she said.

According to Dealogic, 皇冠体育app contributed 9 percent of the global merger and acquisition business in the first half of the year and 30 percent of Asia-Pacific region in terms of value.