China’s overseas investment up 63.6% in 2008

Chinese investments abroad leapt by 63.6% in 2008 but the pace slowed down towards the end of the year.

Non-financial direct outward investment, excluding investment by banks, insurers and securities firms, amounted to $40.65bn last year, according to a news agency report.

Previous data showed investment in the first half of 2008 was $25.7bn, so the total suggested a slowdown in the second half of the year as the international financial crisis began to take a toll on the Chinese economy.

Despite the slowdown overseas investments should continue to grow as China is keen on securing raw materials and other resources to fuel its fast expanding economy.

With the world’s largest foreign exchange reserves at $1.95 trillion, Beijing also needs to direct the cash abroad to reduce pressures on the appreciation of the Chinese currency.

There is a clear trend for Chinese enterprises to invest abroad despite short-term economic problems. China has a recognisable medium- and long-term strategic need to secure its supply chains.