• 35% to 40% of FDI into China takes place through alliances -JVs or others- (U.S. China Business Council), or through re-investment of Chinese capitals from Hong Kong or other tax havens.

• An average 26% of all the FDI received by developing countries and 11% of FDI world flows. 71% manufacturing and 21% services (i.e. 2005-2006 FDI US$167.600 mill, UNCTAD 2004).

Chinese Foreign Investment. Out-Flows

• One of the main foreign investors in the world. “China has taken the fourth position in the ranking of foreign investors, according to a poll among foreign investment agencies.., after the U.S.A., U.K. and France” (CEPAL 2005). 

• Chinese authorities informed of approximately 9.000 Chinese companies investing out of China, in 170 countries.

• Japan, U.K., U.S.A. Germany, Denmark, Sweden, Spain, France, Singapore, Korea, Canada, Australia, and several others have established institutions to attract foreign investment from China.

• Catalogue for Foreign Investment Recommended Areas (Ministries of Commerce and Foreign Affairs). 67 countries. 

• National policies to promote foreign investment (Guangdong y Shanghai);
  (a) tax incentives;
  (b) soft loans;
  (c) Import guarantees.

• Approaching natural resources.

• Increasing scarcity.

• China, HK, Japan, Taiwan, Singapore, Korea and Malasia, are taking strategic positions.

• The increasing prices of natural resources is generating;
  Elimination of intermediaries;
  Incentives to strategic alliances and M&A;

• The places to be chosen shall be those with qualities to become platforms. (CEPAL 2005).

Types of Foreign Investment. Out-Flows

Type I. Greenland investment
(Haier, TCL, Gree).

Type II  M&A  (4 categories)
One. Natural Resources (China National Off Shore Oil Company Ltd, China Huaneng, CITIC, Yanguang Group, Jilin Kichkel, Sinopec, China Minmetals, Baosteel, Baoshan, etc).

Two. Production Extension and Marketing. (Shanghai Haixing-Glenoit Corp-Specialty Fabrics, Shanghai GM-Daewo, TCL-Schneider, Alibaba-Yahoo China, Lenovo-IBM)

Tres. Reverse contracting.  (Wanxiang Group-UAI  securing the suplí of spare parts)

Cuarto. Technologies. (Shanghai Electric Group-Akiyama Japan, China Telecom-Excelcomindo, Huawei-British Telecom, ZTE-Ericsson, BOE Tecnology-TPB,  BenQ a Siemens, etc)

Type III. Strategic Integration           
(TCL con Thompson, 8 biotech Biotecnología; Huawei con Siemens-NEC-Matsushita-Infineon; China Mobil con MTV, China Telecom-NEC)

Type IV. R&D Investment  
(Huawei Technologies, BOE Technology-Nynix Semiconductors, China Telecom, Konka Electronics, Guangdong Glanz Group,  Haier, etc)