Mainland firms invest US$20.5b overseas

Cashed-up mainland firms have almost doubled their spending on overseas assets, investing US$20.47 billion between July and September.

Mainland outbound investments jumped 190.4 per cent in the quarter from the same period last year, taking the total for the year to US$32.87 billion, the Ministry of Commerce said yesterday. Much of the growth was attributed to government incentives.

Some economists said mainland investors had seen their confidence restored compared with the third quarter last year when the global financial crisis struck.

'Outward investments have risen rapidly in the past year, and there is a clear trend that it will continue in the next decade,' Nomura International economist Sun Mingchun said. 'State-owned firms have a lot of cash, which means they have greater capacity to expand abroad.'

He expected companies in the financial and manufacturing sectors to be the most sought-after targets of mainland investors.

Mainland firms, particularly deep-pocketed state-owned ones, snapped up mineral and mining assets and manufacturing companies across 112 countries in the first nine months, during which about 43 per cent of the total investments were direct, the ministry said. However, the investments excluded acquisitions in the financial sector.

One of the largest deals cut last quarter was Yanzhou Coal Mining's US$2.9 billion acquisition of Australian counterpart Felix Resources in August, which won Australian government approval last week.