B&R, digital to drive ODI

An employee works on the window frame of an electric bus at the BYD Coach and Bus factory in Lancaster, California. BLOOMBERG

Strategic, focused investments to help optimize overseas moves

Outbound direct investment of China is expected to rise at a healthy rate this year, particularly in areas like digital economy, high-end manufacturing and sectors related to the Belt and Road Initiative, said officials and experts.

China's ongoing policy adjustment will ensure ODI grows to keep pace with ongoing industrial upgrade and supply-side structural reform, as well as closer business ties with countries and regions participating in the Belt and Road Initiative, they said.

"Under the new global business setting, we will see more Chinese companies investing overseas this year," said Liang Guoyong, economic affairs officer at the Investment and Enterprise Division of the United Nations Conference on Trade and Development.

But unlike in the past two years, new ODI will tend to be more rational and focus on real economy, digital economy and big-ticket infrastructure projects, especially those in markets related to the Belt and Road Initiative, Liang said.

"The policy will ensure the investment is rational and prevent money laundering under the disguise of overseas investment."

China's ODI has been making news. Zhejiang-based Geely Holding Group announced late last month that it acquired a 9.69-percent stake worth about $9.2 billion in Daimler AG through an investment fund, becoming the single largest investor in the German automaker.

In early February, HNA Capital, a subsidiary of Haikou-headquartered HNA Group, signed a strategic cooperation agreement with China Asia Pacific Assets and Property Rights Exchange Ltd to develop the markets involved in the Belt and Road Initiative.

HNA Capital will set up a 20 billion yuan ($3.15 billion) fund to support infrastructure, financial sector and high-tech projects related to the initiative.

China's non-financial ODI saw double-digit growth in January, the third consecutive monthly increase, data from the Ministry of Commerce show.

In January, China's non-financial ODI backed 955 overseas businesses across 99 countries and regions and reached 69.5 billion yuan, up 30.5 percent year-on-year, according to the ministry.

"The structure of outbound investment has been optimized, no new ODI projects were reported in property, sports or entertainment in January," said Zhou Liujun, director-general of the Ministry of Commerce's department of outward investment and economic cooperation.

China encouraged ODI in markets involved in the Belt and Road Initiative and the effort paid off in January, with Chinese companies investing $1.2 billion in 46 countries and regions concerned, up 50 percent yearon-year and accounting for 11.4 percent of the Chinese ODI worldwide, according to the Ministry of Commerce.

"Chinese companies, primarily State-owned enterprises, are keen to cooperate with foreign companies to work in 'third party' markets anywhere related to the initiative," said Zhang Yansheng, chief economist at the China Center for International Economic Exchanges.

Li Guanghui, vice-president of the Chinese Academy of International Trade and Economic Cooperation in Beijing, said China's fast-growing 4G and 5G mobile telecommunication networks will provide a solid foundation for its manufacturers, going forward.