By staff reporter LI WUZHOU

SINCE the late 1980s transnational investment across the world had been growing exponentially on the basis of industrial transfers, strongly bolstering economic globalization trends and profoundly altering the world’s economic landscape.

The 2008 financial crisis nevertheless impaired the investment capacity of many transnational companies and also dampened their desire to spend. The 2012 global volume of direct foreign investment fell to US $1.4 trillion, 40 percent lower than in 2007. Against this grim scenario, capital meted out by China has, however, been on the rise. The country’s recent promulgation of more measures to step up its international investments is closely watched by other countries.

A World Eager for Chinese Capital

Foreign direct investment (FDI) has played a key role in China’s rapid growth over the past decades. In the 35 years of opening-up and reform, China has absorbed more than US $1.2 trillion in FDI, and remained perched at the top spot among FDI destinations for 20 consecutive years.

As its economic strength built up, China itself began to invest in other countries, steadily growing into one of the largest international investors among all countries in the world. China’s outbound investment increased at an average annual rate of 40 percent in the past decade, hitting US $87.8 billion in 2012, the third largest globally, and setting a new record in 2013 at US $100.45 billion. The sum is expected to reach US $500 billion in the coming five years, a boon for capital-strapped countries.

Chinese investment has been welcomed by the governments and people of recipient countries, as it boosts local economies, creates new jobs and builds up local coffers. In 2012 alone, Chinese businesses in foreign territories paid US $22 billion in taxes to local authorities, and hired over 700,000 people locally.

China is now seen as the world’s great hope – quite evident at the Fifth China Overseas Investment Fair (COIFAIR), held in Beijing last December. “No other word better describes the event than ebullience,” commented He Zhenwei, executive vice secretary-general of the China Overseas Development Association (CODA), sponsor of the fair. “Participating countries were very active, holding 24 events in two days. These included exhibitions, discussions, forums, promotions and news conferences, all packed to full capacity.” Approximately 2,200 Chinese and foreign companies, financial institutions and research bodies attended the event, and over 200 businesses and organizations from around 70 countries and regions set up stands to solicit investment.

CODA Chair Zhang Baoguo was equally impressed. Before starting his speech at a forum on investment in Latin America, he took out his phone and said: “Please excuse me for taking a photo first. It’s been a long time since I last saw such a spectacular audience.” All the seats were filled and aisles crowded, with spectators spilling out of the hall.

Long queues formed at the negotiation tables of many stands during the fair. “We didn’t expect so many visitors, and that was true on both days,” said Fan Yeliang, president of HK-based Jinqiao Group, “My colleagues and I had to work shifts to receive people coming to discuss business deals.” The company’s international operations include constructing and renovating power plants, with a huge demand in the international market.

China Eyes World Markets

A Chinese engineer from the Sinopec Group’s Zhongyuan Oil Field with local workers in Saudi Arabia. Sinopec was among the first Chinese enterprises to go global.