By Hu Jiangyun, China development impact research team, Research Development of Foreign Economic Relations, Development Research Center of the State Council (DRC)

Report No 104 (Total 4603)

Summary:

China began increasing direct investment in foreign countries when it started its "going out" strategy from the beginning of the 21st century and, by 2012, saw its foreign direct investment reaching $87.8 billion, an increase of 17.6 percent year-on-year, compared with a decline of 17 percent globally.

After the international economic crisis, China's direct investment to foreign countries developed rapidly and making it the third largest economy in investment abroad and giving it a greater influence abroad. And its investment abroad has been beneficial for recovery and growth in the global economy and can improve China's cooperation with East Asia, increase local employment opportunities, and have a spillover effect.

The country will also see its status improve internationally along with its economic structure, and it can help the growth of multinationals and the balance of payments internationally. Still, there are many problems in China's investment abroad and the country needs to promote its status in a comprehensive way as a net capital exporter.