China ODI Surges 53.3%

China’s outbound direct investment is surging despite weak global growth as Chinese companies continue to internationalize their business.

Non-financial ODI increased 53.3% year-on-year to reach $145.96 billion in the January-October period, easily surpassing the total for 2015 of about $121.4 billion, according to the Ministry of Commerce on Thursday, Xinhua reported.

In October, ODI grew 48.4% year on year to reach $11.74 billion.

China’s overseas investment reached 162 countries and regions, most of which has gone to Hong Kong, ASEAN, the European Union, Australia, the United States, Russia and Japan in the first ten months, with the United States posting the strongest year-on-year growth at 173.9%.

ODI continued to exceed foreign direct investment into the Chinese mainland, which rose 4.2% year-on-year to reach about $98 billion in the same period. China’s ODI exceeded FDI for the first time ever in 2015, becoming a net capital exporter.

In addition to growing investment volume, the pattern of China’s ODI is changing rapidly as the consumer and services sectors gather momentum.

China’s overseas investment started with raw materials, moved on to infrastructure and manufacturing, and is now starting to focus on big-name consumer brands and high-tech companies, according to a research note from HSBC.

Official data showed that in the first ten months, most of the investment flowed to commercial services, manufacturing and retail, with equipment manufacturing almost quadrupling last year’s investment.

Once dominated by large state-owned enterprises in search of iron ore and copper, China’s ODI now includes private sector giants buying US film studios and European fashion houses, along with state-backed companies snapping up new tech firms, the HSBC note pointed out.