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MOFCOM, SAFE, NBS Jointly Issue the Annual Statistical Communiqué of China’s Outward Foreign Direct Investment

On September MOFCOM, State Administration of Foreign Exchange, National Bureau of Statistics jointly issued the Annual Statistical Communiqué of China’s Outward Foreign Direct Investment 2019 (the Communiqué) and officially unveiled the statistics of China’s OFDI in 2019.

The Communiqué introduces China’s OFDI in 2019 in six sections, including an overview of China’s OFDI, the characteristics of China’s OFDI, China’s investment in major economies, the composition of OFDI investors, the regional and sectoral distribution of OFDI enterprises, and comprehensive statistical data.

According to the Communiqué, China’s OFDI in 2019 has the following features:

First, China’s OFDI flow ranked second and the stock remained the third largest in the world. In 2019, China’s OFDI was USD 136.91 billion, down 4.3% year-on-year, and the scale of the flow was second only to Japan (USD 226.65 billion). By the end of 2019, China’s OFDI stock had reached USD2.2 trillion, second only to the United States (USD 7.7 trillion) and the Netherlands (USD 2.6 trillion). China’s influence in global FDI continued to expand. Chinese OFDI flows accounted for more than 10% of the global share for four consecutive years and 10.4% in 2019; the stock accounted for 6.4%, unchanged from the previous year. In terms of two-way investment, the scale of China’s OFDI in 2019 was 3.1% lower than the foreign investment it attracted.

Second, China’s OFDI covered 188 countries and regions around the world, and investment in countries along the Belt and Road grew steadily. By the end of 2019, over 27,500 Chinese investors had set up 44,000 enterprises in 188 countries (regions) around the world, covering more than 80 percent of the world’s total. The total assets of Chinese enterprises overseas at the end of the year amounted to USD 7.2 trillion. More than 10,000 enterprises were set up in countries along the Belt and Road, with direct investment of USD 18.69 billion in 2019, up 4.5% year-on-year, accounting for 13.7% of the flow in the same period, and the year-end stock standing at $179.47 billion, accounting for 8.2% of the total. China’s total direct investment in the countries along the Belt and Road amounted to USD 117.31 billion between 2013 and 2019.

Third, China’s OFDI is diversified and 80% of the stock goes to the service industry. In 2019, China’s OFDI covered 18 major industry categories of the national economy, and over 70% of the investment flowed to the four major industries of leasing and business services, manufacturing, finance, and wholesale and retail. At the end of 2019, 80% of China’s outward direct investment stock was in the service industry, mainly in leasing and business services, wholesale and retail, finance and information transmission/software and IT services, real estate, and transportation/warehousing.

Fourth, the outward direct investment from central SOEs grew fast and local SOEs’ stock accounted for over 40%. In 2019, central SOEs made USD 27.21 billion of investment in the non-financial sector, up 18% year-on-year; local SOEs invested USD 89.74 billion, down 8.7% year-on-year, accounting for 76.7% of the country’s non-financial flows, down 4.3 percentage points from the previous year. Guangdong, Shanghai and Shandong ranked among the top three places for local outward direct investment in 2019. By the end of 2019, the stock of local enterprises’ outward non-financial direct investment had reached USD 785.55 billion, accounting for 40.4% of the national non-financial investment stock.

Fifth, China’s OFDI made remarkable contributions to the host country’s tax revenue and job creation and brought notable win-win results. In 2019, Chinese enterprises overseas paid USD 56 billion in all varieties of taxes to the host countries, and employed 2.266 million foreign employees, which accounted for 60.5% of the total number of employees of Chinese enterprises overseas. Outbound investment contributed to USD 116.7 billion of exports, accounting for 4.7% of China’s total goods export, and achieved sales revenue of USD 2,512 billion, up 4% year-on-year. Chinese enterprises overseas did well in 2019, with over 70% of them making profits or breaking even.