Hong Kong: The Bridgehead for Chinese Outbound Investment

The 13th Five-year Plan (2016-2020) is to promote innovation as a long-term strategy to facilitate growth in a sustainable manner. Emphasis is also put on further improvement in utilitsation of foreign investment and outbound investment activities. Coupled with the Belt and Road Initiative, mainland enterprises are encouraged to enhance their outbound investment activities, including the countries along the Belt-and-Road.

There are an increasing number of mainland enterprises seeking to transform and upgrade themselves via investment in advanced technologies, intellectual property and brands, while bringing such know-how back for use in the mainland’s domestic market.

Apart from state-owned enterprise, more and more mainland private enterprises are also looking to invest in a wide array of sectors, covering industrial and manufacturing technologies, clean technology and new materials, distribution network, consumer brands, modern business solutions, etc., so as to maintain their competitiveness in the world market.

Investment Trends

According to the figures from Ministry of Commerce of the People's Republic of China (MOFCOM), Mainland China recorded the third largest FDI outward stock, at USD1,982.27 billion, in the world as of end-2018. Hong Kong is the leading destination for Mainland China’s outward investment, and is accounted for more than 55% of Mainland China’s outward FDI stock as of end-2018.

Source: 2018 “Statistical Bulletin of China’s Outward Foreign Direct Investment”

Major Sector Focus of Chinese Outbound Investment

The scope of China’s outward FDI is extensive, including leasing and business services, finance, mining, wholesale and retail trade, manufacturing, transport/storage/postal services and real estate.

 

Source: 2018 “Statistical Bulletin of China’s Outward Foreign Direct Investment”