China is Now the Second Largest Investor in the World

China is Now the Second Largest Investor in the World
Jun 21, 2017 Translated by

On June 7th, the United Nations Conference on Trade and Development (UNCTAD) released their 2017 World Investment Report. The report indicates that in 2016, China’s outward foreign direct investment (FDI) increased by an astounding 44%, reaching $183 billion and pushing China to the rank of second largest outward foreign investor according to this report for the first time.

UNCTAD is a permanent bodies of the General Assembly of the United Nations. As an international economic organization, it deals with issues of international trade and economic development and annually publishes the World Investment Report.

The report states that global FDI fell by 2% this year or $17,500, owing to weakening economic growth and massive risk in economic policy and regional politics. However, the report also predicts that there is reason for cautious optimism due to the possibility of a mild trend of recovery in the future. In 2017 global FDI may increase by 5%, 1.8 billion.

Inflow into developing Asian economies fell 15% in 2016 to $443 billion, the first fall since 2012. China’s attraction of FDI, however, held relatively steady at $134 billion, a mere 1% decrease from the year previous and still number three in the world.

Its worth noting that China’s 2016 outward FDI broke historical highs, pushing it to become the second largest investor in the world for the first time. By contrast, FDI outflows in other Asian countries fell substantially.

According to an explanation provided by the Chief Editor of this report and Director of Investment and Enterprise at UNCTAD, China’s overseas investment has entered a stage of rapid expansion. That said, the country is also facing challenges such as protectionism. Furthermore, due to global limits of FDI flows and the ever weakening advantages of cheap production costs China once had, investment in China will likely not be increasing by a large margin in the foreseeable future. 

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Keywords: FDI China investment


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