China overseas direct investment to exceed FDI by 2017 says study

The ravenous appetite of mainland firms for market share abroad and advanced technologies will make the world's second-largest economy a net global investor by 2017 as it continues to wield its economic influence, a study by the Economist Intelligence Unit (EIU) says.

The study predicts that the mainland's outbound direct investment (ODI) will jump from US$115 billion last year to US$172 billion in 2017, exceeding the amount of foreign funds coming into the country, and driven by mainland firms' ambition to tap overseas markets and their growing awareness of enhancing research capabilities.

Robin Bew, the editorial director and chief economist of EIU, a sister company of The Economist magazine, said: "They want to go to places where there are real opportunities, opportunities for them to drive their revenues and enhance products and know-how.

"Within five years, China's role in the global economy will completely change, which is to be out, investing overseas."

Inbound foreign direct investment was one of the key drivers for the mainland's fast-growing economy in the past three decades as multinationals flocked to the world's most populated market, boosting its economic output and creating millions of jobs.

The mainland's outbound investment then took off in 2005 as Beijing encouraged state-owned giants to go overseas amid the country's increasing economic might.

Between 2005 and 2012, outbound investment by mainland firms grew at an average pace of 35 per cent year on year, with the mainland's global investment ranking climbing from 16th place to third place, after the United States and Japan.