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Snapshot of the Chinese
overseas investments
Overall picture
-In 2012, China’s non-financial overseas direct investment (ODI) reached to US$77.2 billion, a
growth of 12.6% over the previous year. This growth rate is quite impressive, particularly
under the influence of the global financial crisis (2008) which resulted in dramatic contraction
of investment activities in the world.
-A large amount of the investment was for acquiring mineral resources to support the
domestic economic expansion
Where have the Chinese invested?
2010
Geograpgic distribution of overseas investment by 24 Chinese mining companies
with 204 projects
70
59
60
51
49
50
2009
40
30
20
20
14
11
10
0
Africa
S American
N American
Asia
Europe
Ociania
Geographic distribution of overseas investment of 24 Chinese mining
companies with 181 projects
2008
Number of projects
60
50
53
48
45
40
30
19
20
9
7
10
0
African
S American
N American
Asia
Europe
4
Ociania
Where is the Chinese money spent?
2010
Geographic distribution of total investment (US$ million)
40,000
35,000
33,391
31,537
29,847
US$ million
30,000
24,125
25,000
20,000
15,000
7,812
10,000
3,035
5,000
-
Africa
2009
35,000
US$ million
30,000
S American
N American
Asia
Europe
Ociania
Geographic distribution of overseas investment by Chinese mining companies
29,915
29,418
29,439
23,568
25,000
20,000
15,000
10,000
6,412
5,000
503
Africa
S American
N American
Asia
Europe
Ociania
Investment (US$ million)
31,663
30,073
24.4%
23.2%
20%
Percentage (%)
30,000
15,993
12.3%
10%
8,550
6.6%
0%
Other
commodities
Platinum
Iron ore
Gold
Copper
Coal
1,442
1.1%
Non-mining
1,453
1.1%
1,026
0.8%
-
Nickel
6,901
5.3%
10,000
16,112
12.4%
Lead and
Zinc
16,533
12.7%
20,000
2009
Investment (US$ million)
30%
30,073
25.2%29,265
24.5%
Percentage (%)
30,000
20%
13,554
11.4%
5.1%
Lead and
Zinc
Iron ore
Gold
Copper
Coal
7.0%
565
1.2%
0.9%
-
10%
8,389
1,453
1,028
0.5%
0%
Non-mining
10.7%
Other
commodities
12,736
6,069
Platinum
13.5%
10,000
Nickel
16,124
20,000
Percentage (%)
China overseas mining investment by 24 companies
40,000
Aluminum
Investment (US$ million)
30%
Chinese overseas mining investment by 28 companies
Percentage (%)
40,000
Aluminum
2010
Investment (US$ million)
What commodities are favoured by the Chinese?
30,000
2008
30%
25,636
27%
20,000
15,624
13,980
15%
16%
15,000
15,838
16%
13,273
14%
10,000
15%
in
g
0%
in
on
-m
N
O
th
e
rs
m
tin
u
la
P
nd
Le
ad
a
Ir
o
550
1%
ic
ke
l
zi
n
c
re
n
O
ol
d
G
er
op
p
C
oa
l
C
in
iu
m
um
20%
5%
1,890
2%
513
1%
N
2,375
2%
0
25%
10%
6,595
7%
5,000
A
US$ million
25,000
Percentage over total investment (%)
Overseas investment by Chinese mining companies
6
Types of investment projects
-Although most investments are directly for mining (64% of total projects), the Chinese companies
are also involved extensively in infrastructure and engineering projects (25%) and trading activities
(10%) to support their mining initiatives.
Type of investment projects
Mining
Engineering
Trade
Other
Total
165
64
25
4
258
64%
25%
10%
2%
100%
200
Type of investment projects
165
160
120
80
64
40
25
4
0
Mining
Engineering
Trade
Other
China’s mining investment in Africa
China’s mining investment in Africa
- DRC, South Africa, Zambia and Zimbawe are the main destination countries in Africa.
- Out of the total investment of US$26 billion, 81.6% or US$21 billion is for infrastructure development.
Copper, iron ore and platinum are the focused commodities.
81.6%
Chinese investment in Africa
25,000
Investment (US$ million)
70%
2,651
790
9
2.7%
5,000
2.1%
30%
0.3%
10,000
3.0%
50%
10.2%
15,000
0.0%
US$ million
21,173
Percentage (%)
20,000
90%
80
550
705
10%
-
-10%
Auminium
Copper
Iron Ore
Nickel
Platinum
Others
Non-mining
CLOSING REMARKS
-China is speeding up its investments in other parts of the world. The global
financial crisis did not stop the Chinese ambition to secure raw materials supply.
-Asia and Africa are the two main destinations for Chinese overseas investment.
Australia has also become a major beneficiary of the Chinese money in the
mineral sector.
-Aluminium, iron ore, copper and nickel are the main target commodities of the
Chinese investment. This is in line with the actual need of import of minerals in
the Chinese domestic market.
-Apart from the major state-owned mining companies, private Chinese
investments have also become an important player in the overseas mining
investment, although the latter is still relatively small in terms of capital capacity.
CLOSING REMARKS
- Chinese companies are flexible in terms of format of investment and have
developed various models to suit different situations:
-In Asia, similarities in traditional culture and political system provide a good
platform for Chinese investors to work together with the local partners. Companies
often use governmental supports from both China and the host countries to
advance their pursuit.
-In Africa, the Chinese companies take advantages of the strong historical ties and
political relationships between China and African countries to strengthen their
competitiveness in acquiring mineral resources.
-In their overseas quest for raw materials, Chinese companies often work together
to combine their respective skills and expertise to enhance their competitiveness.
They get involved not only just for development of mineral deposits, but also for
infrastructures and agricultural projects. The host countries benefits more from
such approach than simple mining. The Chinese investors could harvest from either
mine development or infrastructure constructions or from both.