Skip to content

Energy and Mining – the Top Area of China’s State-Driven Foreign Direct Investment

According to the statistics of China’s Ministry of Commerce, in 2010, China’s foreign direct investment (FDI) amounted to a historic $68.81 billion. With 5.2% of the global total FDI, China ranked fifth highest in the world. Most of the investment flows to six sectors: leasing, business services, and finance; wholesale and retail; energy and mining; transportation, storage, and postal services; and manufacturing.

The state-own enterprises accounted for 66.2% of the non-financial FDI stock, down three percent from the 2009 figure. Of these, the enterprises and units under the central government reached $42.44 billion, accounting for 70.5% of the flow. Pei Changhong, director of the Economic Institute under the Chinese Academy of Social Sciences, believes that China’s overseas investments are, to a large extent. driven by national policy. The system of relevant policies and investment services has not been fully established. An example is the recent losses suffered in Libya, which occurred because of a lack of investment insurance policies.

In terms of targeted markets, China’s FDI has a high concentration in Asia, especially Hong Kong, and in Latin America. The footprint in developed economies such as North America and Europe is still low. The energy and mining sector remains the top area of investment.

Source: China Economic Weekly, November 29, 2011