China's outward investment surges as growth pattern shows significant shift

China's outward direct investment (ODI) more than doubled year on year to US$12.62 billion last month, while foreign investment inflows slumped to a four-year low, marking a huge shift in the growth pattern of the world's second-largest economy.

President Xi Jinping is expected to sign major investment agreements when he begins a state visit to India today, with the deals estimated by some to be worth as much as US$100 billion. Earlier this year, Chinese leaders were accompanied by huge business delegations during visits to South Korea and Britain.

Ministry of Commerce spokesman Shen Danyang said yesterday such estimates of the value of deals to be signed in India might be "wishful thinking", but observers still expect major deals to be announced, with Asia's largest and thirdlargest economies keen to bolster trade and investment ties.

China is hoping to diversify its US$4 trillion worth of foreign exchange reserves by investing abroad, while at home its economic growth has suffered from a serious property market downturn, and industrial output has grown at the slowest rate since the global financial crisis.

Foreign investors have expressed concern about a worsening business climate after Beijing launched anti-monopoly probes into companies including Microsoft, Qualcomm and Toyota.

Foreign direct investment (FDI) fell 14 per cent year on year last month to US$7.2 billion, following July's 17 per cent decline. In the first eight months of the year, FDI dropped 1.8 per cent, with investment from major trade partners slumping between 9.7 per cent and 43.3 per cent. Japan saw the biggest drop.