Home Country Macroeconomic Determinants of Chinese OFDI

Compared with foreign direct investment (FDI) inflows, Chinese outward foreign direct investment (OFDI) used to be quite small. According to UN statistics, China’s FDI inflow-outflow ratio was 6.4:1 in 2005 (Cheung & Qian, 2008). However, Chinese investment abroad has increased dramatically since 2007. In 2008, Chinese OFDI outflow reached US$52.1 billion, which equals China’s 2003 FDI inflow. In 2009, Chinese OFDI outflow was US$48 billion, more than double 2007’s outflow (US$22.5 billion) (UNCTAD, 2010). In 2010, it reached $57.9 billion. According to recent statistics from the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce in the People’s Republic of China, US$255.4 billion has been designated for non-financial direct investment by Chinese investors to more than 15,000 enterprises in 174 countries and regions by the end of 2010.