China outbound investment pvt cos lead large increase

BEIJING, Oct 4 (Xinhuanet): Despite recent growth, China's outbound investment remains small compared to developed countries like the US. But as more and more large private companies continue to emerge and flourish in China, analysts say they expect those firms to lead the way in overseas investing.

With US$4.0 trillion of foreign reserves in China, demand for outbound investment is sky high. China's non-financial outbound investment increased 15 per cent during the first eight months of this year, compared with the same period in 2013. James Zhao, CIO of China Construction Bank Principle Asset Investment, says outbound investment is a great way to diversify investments globally for risk management.

China has produced many successful businesses in recent years, but most limit their operations to China. Liu Jing is a finance professor at Cheung Kang Graduate School of Business and he says that Chinese companies need to extend their businesses globally to gain more opportunities.

Investments in developed markets such as the European Union, the US, and Japan grew significantly in the first eight months of 2014 from last year. Experts say that low valuations and stable economic outlooks make developed markets more attractive to Chinese investors.

China's outbound investment is still in its infancy. Many experts expect China's appetite for outbound investment to remain strong, particularly in the private sector, where the benefits for having a globally diversified business are huge.