Is there a Chinese ODI model?

China is already an important player in overseas direct investment (ODI). But for China, this is a relatively recent phenomenon.

Before 2004, the size of Chinese ODI was rather trivial. From 2004, China's ODI grew significantly together with a dramatic expansion of its current account surplus. Its ODI increased from $2.85 billion in 2003 to $56.53 billion in 2009, an average growth rate of about 55 percent a year. During the same period, its share in global ODI flow rose from 0.45 to 5.1 percent. In 2009, China not only became the largest investor among developing countries, but also the fifth largest investor in the world - preceded by the United States, France, Japan and Germany.

China's case challenges the perception that ODI is dominated by developed countries. It is also exceptional in that while China enjoys comparative advantages in certain manufacturing industries, evidenced by its competitiveness in exports and domestic development, they are not areas in which Chinese ODI is concentrated. According to official statistics, most of China's ODI is in the service industry such as commercial financial services, and retail and wholesale sectors.