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China to Play Major Role in Foreign Direct Investment, Deloitte's CEO Says
China will become an increasingly important source of foreign direct investment, according to Deloitte Touche Tohmatsu.
“I think that’s where we are in the life cycle for China as an economic engine for the global economy,” James H. Quigley, the chief executive officer of the privately held auditor, said in an interview at a trade fair in southern Xiamen city. “It’s been an important target for inbound investment, now we see China investing overseas. It is healthy for the world economy and part of the rebalancing that is needed.”
China has invested in railways and hydroelectric power in Africa and mining and oil in Latin America to feed its expanding economy, which surpassed Japan as the world’s second-largest in the second quarter. The country increased commitments for infrastructure in Africa to about $7 billion in 2007 from less than $1 billion per year before 2003, the World Bank said.
China Railway Group Ltd., the world’s second-largest publicly traded heavy construction company, said on Aug. 24 it was in talks with South Africa’s government for a $30 billion high-speed rail link between Johannesburg and Durban. Standard Bank Group Ltd., Africa’s biggest lender, may be involved in the project’s funding, China Railway Chairman Li Changjin said.
China’s outbound investment may exceed 100 billion yuan in 2013 and match foreign direct investment in the country in 2015, the 21st Century Business Herald reported Aug. 31, citing Fan Chunyong, executive vice-president of the China Industrial Overseas Development and Planning Association.
China is committed to developing domestic companies into multinationals and will encourage companies to expand globally, Chinese Vice President Xi Jinping said in a speech in Xiamen today. The country will increase overseas infrastructure construction cooperation, Xi said.
“The question facing us is can the superior GDP growth that China has enjoyed in the recent years be sustained?” Quigley said. “I believe the answer to that question is yes. China is going to play a very significant role in outbound foreign investment.”
--Chua Kong Ho in Xiamen. Editors: Allen Wan, Richard Frost
To contact the Bloomberg News staff on this story: Chua Kong Ho in Xiamen at kchua6@bloomberg.net
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