Understanding the complex regulatory approval process for China’s outbound foreign direct investments
By Chet Scheltema, Frank Yang, and David Chan from Dezan Shira & Associates
Dec. 31 – Times are changing for the global financial community. China was the largest investor in developing economies in 2010 and 2011, with total outbound foreign direct investment (OFDI) amounting to US$60 billion annually and projected to reach US$150 billion by 2015. Furthermore, Chinese leaders have now officially prioritized Chinese outbound investment over the historical priority of inbound foreign direct investment.
China’s support for OFDI, however, has a strategic basis and is highly selective. The purpose is to focus outbound investment in a manner that fosters the growth and development of strategic Chinese industries, not to generally liberalize or relax foreign investment or foreign exchange policy. Priority investments would include those that expand markets for Chinese companies, obtain critical know-how and technology, and secure resources for China’s internal growth.
