Economy

China Will See ODI Peak in 2015

Chinas outward direct investment （ODI） will continue to post robust growth this year， evidence of Chinese companies efforts to go global， according to a report from the National Development and Reform Commission， Chinas top economic planner， issued on March 5.

Chinas non-financial ODI is estimated to reach US $113 billion， an increase of about 10 percent from the previous year， noted the report on the implementation of the 2014 plan and on the 2015 draft plan for national economic and social development.

“We will move faster to build a system for providing financial services to outward investment， expand channels for using foreign exchange reserves， and provide better financial services， information services， legal services， and consulate protection for Chinese enterprises investing overseas，” the report said.

Latest data showed that Chinas ODI by nonfinancial firms surged 40.6 percent to US $10.17 billion in January， with the Hong Kong Special Administrative Region （SAR）， the Association of Southeast Asian Nations （ASEAN）， and the European Union as top investment destinations.

China to Slash Foreign Investment Restrictions

China plans to halve the number of industries in which it restricts foreign investment， Premier Li Keqiang announced while addressing national legislators at the annual session of the National Peoples Congress（NPC） held in March. China will improve how it regulates foreign investment and create a “stable， fair， transparent， and predictable” business environment， said Premier Li Keqiang. The country will explore a management mode for foreign investment featuring pre-entry national treatment plus negative list.

In November， Chinas central authorities solicited public opinions on revising the Catalogue for the Guidance of Industries for Foreign Investment， which governs restrictions on investment from abroad. It plans to reduce the 79 industries inaccessible to foreign investors to 35. Industries where the ban on foreign investment will be lifted include steel， ethylene， oil refining， and white spirits. Meanwhile， foreign investors will be encouraged to invest in such fields as modern agriculture， high and new technology， advanced manufacturing， energy saving， environmental protection， new energy， and the modern service industry.

Attracting more investment by further opening up will bring China more new technology， managerial expertise and talents， and will greatly advance the countrys economic transformation and upgrading.endprint

U.S. Firms Optimistic about China Outlook

About 85 percent of U.S. businesses in China are still “optimistic” or “slightly optimistic” about their five-year outlook despite an economic slowdown and rising costs， according to the recently released annual China Business Report by the American Chamber of Commerce in Shanghai（AmCham Shanghai）.

Seventy-three percent of the 377 U.S. businesses surveyed reported profits in China in 2014， 75 percent saw their profits increase， and 96 percent indicated that they would maintain or increase investment in China in 2015.

There is sustained confidence in business opportunities in China， according to the annual business report by AmCham Shanghai.

The annual report shows that rising costs， human resources constraints， and local competition have been the top three challenges for U.S. firms in China for three consecutive years. As local Chinese enterprises competitive edge sharpens， 81 percent of the surveyed U.S. firms confessed that local competition posed a challenge to their business development in China.

Robert Theleen， 2014 chairman of AmCham Shanghais Board of Governors， remarked that to achieve success in China， the U.S. companies need to tailor their products and services to Chinese customers， and that meanwhile U.S. CEOs in China should improve their cost and revenue management.

China to Improve Internet Infrastructure

China vowed to step up Internet infrastructure construction in 2015. Another 80 million homes will be hooked up to fiberoptic connections and more than 600，000 base stations will be built nationwide to extend the 4G network so that it covers all county towns and developed towns， the Minister of Industry and Information Technology Miao Wei recently reported.

Miao said the development of the broadband network would provide effective support for Chinas economic growth and structural adjustment， thus promoting economic development. According to Miao， China will implement strategic adjustments to broadband to fuel its economic development. They will first be embodied in the expanding coverage of networks and narrowing of the gap between urban and rural areas in accessing and making use of the Internet.

Miao proposed to upgrade Chinese citiesnetwork capacity while popularizing the Internet service in rural areas. “We should shape the broadband network into a new engine for rural economic development，” Miao said.

Miao expects the improvements to stimulate a fresh economic growth point. Chinas information consumption topped RMB 2.8 trillion in 2014， up 18 percent from a year ago.endprint