March 16, 2009

China FDI Flows Reversing


China has been the leading recipient of Foreign Direct Investment (FDI) from other countries since 1992. But FDI in China has declined for the past 5 months and sank nearly 16% in February. Meanwhile Beijing is loosening controls on outbound Chinse FDI with acquistions under $100 million requiring only local authority approval. At current rates, outbound FDI may soon exceed inbound.

Several big Chinese outside investments are making news including Minmetals desire to acquire OZ Minerals in Australia. Unfortunately for the USA Congressional sinophobia may prevent Chinese investments in ailing American industries. Many analysts expect Chinese investment may focus on resouce commodities and energy...

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