China invested more money abroad last year than foreign firms piled into the country, data showed yesterday, a first for the world’s second-largest economy as Beijing looks overseas as part of its drive to transform its economic growth model.
Overseas direct investment soared more than 18 percent to an all-time high above US$145 billion last year, exceeding the US$135.6 billion of foreign direct investment.
This “historic breakthrough” was a result of the “enhancement of China’s comprehensive national power,” deepening cooperation, and its strategy of encouraging Chinese firms to “go abroad” in search of growth, the government said.
Chinese firms “have to make use of international resources and markets to transform and upgrade,” Ministry of Commerce representative Zhang Xiangchen (張向晨) told reporters at a news conference.
“We feel companies currently are keen to go abroad and actively integrate into global innovation, manufacturing and market networks,” he said.
The information was revealed in the 2015 Statistical Bulletin of China’s Outward Foreign Direct Investment.
Last year Chinese firms conducted US$54.4 billion of mergers and acquisitions (M&A), including the takeover of Italian tiremaker Pirelli & C SpA by state-owned China National Chemical Corp (ChemChina, 中國化工).
In the first eight months of this year, M&A surged to US$61.7 billion, the ministry said, as Chinese companies scored massive investments, from Hollywood studio Legendary Entertainment LLC to leading German robotics firm Kuka AG and Swiss seed giant Syngenta AG.
“We think Chinese companies’ overseas takeovers can help them acquire high-end production elements such as design, research and development, marketing and service to upgrade their positions in the global value, industrial, logistics chains,” said Zhang, adding that they can also contribute to the economies of host countries.
However, problems remain for these companies as they pursue overseas expansion, he said.
“Some companies went with overseas takeovers blindly. We found some firms did not make sufficient research into basics such as the purpose and necessity of overseas M&As. Some ... rushed to expand while some were driven by irrational reasons to simply follow the craze or show off,” Zhang said.
However, while China goes on a buying spree, foreign partners in the US and EU have complained of a lack of reciprocal access to Chinese industries, with many sectors off-limits or restricted to outside investment.
China’s stock of investment in the EU totaled US$64.5 billion last year and US$40.1 billion in the US.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts