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Chinese foreign investment crucial to world economy: experts

Xinhua, December 8, 2016 Adjust font size:

China's capacity to invest in other countries will be crucial to rescue the world economy, experts said at the Boao Forum for Asia in Melbourne on Thursday.

After a period of downturn following the global financial crisis, foreign direct investment (FDI) has recovered to 1.7 trillion U.S. dollars globally in 2015.

FDI is a practice whereby companies or individuals in one country make investments in establishing businesses or acquiring business assets in another country.

Andrew Parker, the leader of consultancy firm PricewaterhouseCoopers Australia's Asian operation, said much of the FDI resurgence has been driven by China.

Ross Garnaut, an economics professor at the Australian National University (ANU) and one of the country's most respected policy experts, said China's vast wealth would be crucial in saving the global economy from this "very tough" period as the popularity of protectionism soars.

"(There has been) very little productivity growth in developed counties such as Australia, almost none in Australia," Garnaut said.

"China has a very big role in getting the world out of these difficulties," said Garnaut, adding that China has announced an ongoing commitment to free trade as the United States and Britain "back away."

Garnaut noted that China remaining open for business can have a very big impact on global financial flows. "China's savings today are as big as the whole world's combined savings when China joined the global economy in 1978," the expert said.

Andrew Martin, the managing director of asset management firm Moelis and Company, said the next wave of Chinese investment in Australia would come from high net-worth individuals, classified as individuals worth more than two million U.S. dollars.

China made a considerable investment in Victoria in 2016, most notably through a consortium which was 20 percent owned by China's CIC Capital buying the Port of Melbourne, Australia's busiest shipping port, for 7.2 billion U.S. dollars in September. Endit