The central government's plan to slow the growth of overseas investment will lead to more successful and quality investments, said speakers at the American Chamber of Commerce in Hong Kong's 2012 China Conference yesterday.
For the 12th Five-Year Plan period from 2011 to 2015, the Ministry of Commerce has set a target of 17 per cent annual growth of overseas direct investment, or ODI, to US$150 billion by 2015, according to a recent announcement by the ministry.
The target rate has been set lower than the 30 per cent in the previous Five-Year Plan period of 2006 to 2010. Chinese investments now span across nearly 200 nations, according to the Commerce Ministry.
'If you have a fast rate of growth, you have lots of bad deals. Slower growth rate can give you better quality. I like this cautious approach,' said Zheng Lili, the co-leader of Asia Pacific International Core of Excellence of Deloitte, one of the Big Four accounting firms.
With a slower growth rate in outbound investment, the rate of success of Chinese companies' overseas acquisitions will go up and the rate of failure will go down, echoed Stanley Jia Tianan, a partner at international law firm Baker & McKenzie.
A slower growth rate in future will be normal, given that China's outbound investment has already attained a large base, Jia said.
