Expected to reached $264b; US tops 67 destinations on list

China's outbound direct investment (ODI) is expected to outstrip its actualized foreign direct investment (FDI) in 2017, making the country a net capital exporter by then, a private survey revealed on Thursday.

China's ODI is estimated to continue its rapid expansion to reach $264 billion in 2017, which would surpass foreign investment flows into the country for the first time, the Economist Intelligence Unit (EIU), a sister firm of The Economist weekly publication, predicted in a report on China's overseas investment.

According to the report, the US tops the list of destinations most favored by Chinese overseas investment.

China's ODI stood at $163 billion in 2013, said the report, which indicates an annualized growth of over 10 percent from 2013 throughout 2017.

As the costs of land and labor rise in China, it is a trend that Chinese companies will look beyond the local market to invest overseas and the annualized growth rate of around 10 percent is not a high rate, He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times on Thursday.

According to data from the Ministry of Commerce, China's outbound investment in the US and EU logged yearly growth of 28.2 percent and 218 percent, respectively, in the first three quarters.

In EIU's China Going Global Investment Index in 2014, which tracks 67 countries and regions based on their attractiveness for Chinese ODI, the US and Singapore ranked as the top two destinations for Chinese ODI.

However, some EU economies including Spain, Italy, Portugal and Greece fell below 30th place in the ranking, according to the report.

It is reasonable that some EU countries with gloomy growth prospects and debt default risk lag behind other countries in the list, but there is still realistic demand from Chinese firms seeking technology and brands through mergers and acquisitions in the EU market, which help boost the investment figure, Zhang Ming, research fellow at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, told the Global Times on Thursday.

However, the low position of some EU economies should raise the alarm for Chinese firms which plan to invest in EU countries to pay more attention to the investment risks, Zhang said.