Growth marks recovery following Japanese quake, Libyan turmoil

BEIJING - Outbound direct investment (ODI) for August rebounded with "double-digit" growth year-on-year following July's sharp drop, the Ministry of Commerce said on Wednesday.

The rebound comes after the Japanese earthquake and tsunami, as well as political turbulence in Libya, hit ODI "in the short term", according to a leading ministry official.

ODI for the year will probably register a "double-digit" increase, despite growth of just 3.3 percent for the first half of 2011, Wang Shengwen, deputy director-general of the ministry's department of outward investment and economic cooperation, said.

ODI for July fell 58 percent from a year earlier to $3.7 billion, the first drop this year, according to ministry figures, as investment in the US, the EU and Japan declined.

"This (July figure) is a special case. But China registered double-digit growth in August," said Wang, who declined to disclose the exact figure.

Wang attributed the growth to the resilience of Chinese companies in overcoming short-term difficulties caused by the situations in Japan and Libya.

The ministry said earlier that China had no direct investment in Libya, but did have engineering projects. These projects were suspended amid the political instability over the past six months, and more than 30,000 Chinese workers left Libya.

"The losses suffered by Chinese companies there are limited," Wang said.

"We are working on a timetable for the companies to go back to Libya. When the time is ripe, China and Libya will sign an investment cooperative framework."

China has yet to officially recognize the National Transitional Council in Libya, which has won recognition from more than 40 countries.

July's sharp decline contributed to a slower ODI growth rate for the first half of the year.

But Wang is optimistic about ODI over the whole year.

Thanks to the debt crises in Europe and the US, and the good image of Chinese companies overseas, "China's ODI in 2011 could grow by double digits," Wang said.

During the first seven months, China's ODI in Australia surged 102.5 percent, and in Hong Kong, 23.9 percent, year-on-year, but the flow to the ASEAN, Russia, the US and EU declined.

"Globalization and the spreading debt crises are providing Chinese companies opportunities to invest abroad," Wang said.

"Developed regions, including the US and EU, Australia and emerging markets" all welcome China's investment. They will become the key destinations for ODI instead of Asian and African nations, Wang said.

In 2010, China's ODI surged 36.3 percent year-on-year to $59 billion. By the end of 2010, China's cumulative ODI was $258.8 billion, concentrated in the mining, manufacturing and retail sectors in Asia, Europe and Africa.

"Now, every nation welcomes Chinese investment," Shen Danyang, a ministry spokesman, said.

Wang said that apart from State-owned enterprises, China's private companies are also active in investing overseas.

Chen Keyu contributed to this story.