China Development Bank in August paid 2.2 billion euros for 201.4 million new shares, or a 3.1 percent stake, in Barclays. Only a month ago, Bank of China opened a new branch in Rotterdam, its first in the Netherlands.
These big deals are a reflection of the push by Chinese financial companies to invest abroad.
China's outbound direct foreign investment to financial sectors stood at $3.53 billion last year, according to the 2006 Statistical Bulletin of China's Outward Foreign Direct Investment.
It's the first time China has released outward foreign investment data including investment to the financial industry such as banking, insurance and securities.
Investment to the financial industry accounted for 16.7 percent of the country's total overseas investment last year, the bulletin said, with banking investing $2.5 billion, or 71 percent of the industry total.
The financial sector's input brought China's total overseas foreign direct investment in 2006 to $21.16 billion.
Of that, $5.17 billion was incremental equity investment, $6.65 billion was current profit reinvestment and $9.34 billion was other kinds of investment, accounting for 24.4 percent, 31.4 percent and 44.2 percent of the total respectively.
China's outward FDI developed quickly last year as more local companies looked to the international marketplace.
By the end of last year, financial outward FDI was $15.61 billion, of which $12.34 billion came from the banking industry and $776 million from insurance, accounting for 79 percent and 5 percent respectively. By the end of 2006, State-owned commercial banks had established 47 branch offices, 31 affiliated institutions and 12 representative offices in 19 countries and regions.
By the end of 2006, China had established 12 financial institutions in the insurance industry abroad.
According to the World Investment Report 2006, global foreign direct investment was $77.87 billion and the stock volume of FDI amounted to $10671.9 billion in 2005. Calculated with this as the base period, China's FDI outflow constituted 2.72 percent and 0.85 percent of the world's total last year, ranking China the 13th.
Chen Lin, vice-director of the commerce ministry's foreign economic cooperation department, predicted China's outward investment would speed up.
"We expected the country's outward investment to reach $60 billion during the 11th Five-Year Plan period (2006-10). Now we believe the actual figure will be much higher than that," he said.
(China Daily October 15, 2007)
