China’s overseas direct investment (ODI) increased by 18% in first quarter year to $40.47 billion, as reported by Ernst & Young in their study titled China’s Foreign Investment Survey Q1 2023.
Particularly, China’s ODI in Belt and Road countries reached US$5.76 billion, a growth of 9.5% on an annualized basis, and NFDIC reached US$31.54 billion, an increase of 17.2%.
The total value of international mergers and acquisitions (M&A) involving Chinese companies dropped by 26% year over year, to $3.49 billion, while the number of agreements dropped by 4% to 116.
Seventy-three percent of China’s FDI is invested in the manufacturing, transportation, real estate, construction, and technology, media, and telecommunications (TMT) sectors during the first quarter.
Investment in manufacturing and transportation rose by 87%, bucking the overall trend, and putting them in the lead for the first time in five years. Sixty-one percent of all trade transactions occur in only three industries: TMT (Technology, Media & Telecom), manufacturing and transportation, and financial services.
China has achieved remarkable success in the first quarter
Vietnam, Oman, Japan, and South Korea are just four of the top ten top-investment countries in Asia, while the Asian area as a whole continues to lead in terms of Chinese direct investment and transactions.
China also inked US$43.15 billion in new contracts for international projects, which is down 9% year-on-year but up 7.2% over the same time last year when it came to contracts signed with Belt and Road countries. That would indicate that demand has increased while transaction sizes have declined marginally.
In this issue of Asian Investment Research Magazine, they addressed the rise of Chinese minority shareholding in ODI projects during the first quarter. A total of US$31.66 billion, China’s Q1 trade with BRI countries was up 9.2 percent year over year.
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