Motives and Patterns of Reverse FDI by Chinese Manufacturing Firms

Abstract

China’s outward foreign direct investment (OFDI) has increased rapidly and continuously since 2003. According to United Nations Conference on Trade and Development (UNCTAD), China’s OFDI flows exceeded US$10 billion for the first time in 2005, US$20 billion in 2006, and US$50 billion in 2008. China’s OFDI reached US$56.53 billion in 2009, according to the Ministry of Commerce (MOC) of China. China’s OFDI flows now stand first among developing countries and fifth among all economies. From 2002 to 2009, China’s OFDI grew by 54 percent annually. By the end of 2009, nearly 12,000 domestic investing entities had established about 13,000 overseas enterprises in 177 countries (regions). Though China’s investment in the developed countries represents a small percentage of overall OFDI, it has risen dramatically recently. China’s investment in Europe reached US$3.35 billion in 2009, an increase of 280 percent year-on-year. And China’s investment in North America was US$1.52 in 2009, 320 percent more than in 2008.