China’s top 10 investment list
by Dar Wong. Posted on July 29, 2012, Sunday
Since 2000, China has been growing rapidly while expanding its exports and erecting state enterprises to explore offshore investments. In the second semester of 2010, China overtook Japan to become the world’s second largest economy with a gross domestic product (GDP) of about US$4.9 trillion in that year.
When emerging markets in the world began to boom in 2005, China had an average of nine per cent growth on every quarter till now. The highest record held at 13 per cent gain in the second quarter of 2007 (2Q07) and two lowest records at 6.8 per cent and 6.2 per cent in first 2Q09 (bottoms of global financial crisis).
Today, China’s export growth continues to be a major trade component for supporting its rapid economic expansion. By statistics, the exports of goods and services constitute about 39.7 per cent of GDP and the latest government figure for June 2012 showed China’s export was valued at US$180.2 billion. Major trade partners are European Union, US, Japan, Hong Kong and South Korea.
Sitting on an estimated US$3.3 trillion foreign reserves, China is considered as the world’s richest nation now. However, with a massive population of 1.3 billion people residing on the great soil, it will take lots of commodities in different sectors involving fuel energies, crops, metals, heavy industries etc to support the rapid growth and huge consumption of its domestic economy.
There is little wonder why China has been extremely active in forming many offshore alliances and corporate acquisitions covering Australia, Mexico, Canada, Middle East, Africa and some emerging markets in Asia in exploring crude, minerals and managing liquefied oil fields.
Before the world succeeds in finding an alternative for energy source, whoever that owns the most power reserves and access to its ready sources of supply could be controlling the world economy in the next 50 years.
Below is the list of top 10 invested countries by China from 2004 – 2010 that ranked by its Foreign Direct Investment (FDI) compiled by the Ministry of Commerce in China:
1) Hong Kong – FDI US$139 billion
2) Caymen Islands – FDI US$27.3 billion
3) British Virgin Islands – FDI US$13.9 billion
4) Australia – FDI US$6.97 billion
5) South Africa – FDI US$5.8 billion
6) Singapore – FDI US$1.55 billion
7) United States – FDI US$3.4 billion
8) Canada – FDI US$2.9 billion
9) Russia – FDI US$2.5 billion
10) Myanmar – FDI US$1.36 billion
According to Reuters news, China is contemplating to top another US$560 billion over the next five years for foreign investments. As many countries are competing to win the favour of China’s investment, the two largest trade partners i.e. Europe and US hope to earn more recognition for receiving additional financial aid from Chinese leaders.
Judging from the current tremendous global slowdown, though China may think it is a good opportunity to spread the seeding capital for foreign investments through many territories, it seems to be uncertain. However, the Chinese leaders need to do their vital calculations correctly to ensure the yields will return on time.
Dar Wong is the founder of PWFOREX.com and professional trader cum hedge advisor since 1989. The expressions are solely his own. He can be reached at dar@pwforex.com
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