Our reporter Liu Liliang
According to the latest research report released by Deutsche Bank recently, due to China's strategies to ensure energy security and resource sustainability as well as explore overseas markets, it is expected that the average annual growth of foreign direct investment in the next five years will probably exceed 20%, and the investment will reach 60 billion US dollars in 2011, when China will become the largest foreign investor in Asia. Among them, foreign investment in the resource industry may account for two-thirds of the total investment, followed by wharf, automobile, banking, telecommunications, electronics and other industries.
Dr. Ma Jun, Chief Economist of Deutsche Bank Greater China, said: "The Chinese government's strategy of promoting" going global "has provided strong support for enterprises to invest abroad. The biggest support for enterprises lies in the tacit understanding between the Chinese government and other emerging market countries in diplomacy, followed by financial incentives, preferential loans, etc."
Ma Jun expects that many Chinese resource companies (including oil and mining enterprises) will outperform their international competitors. First, because of the "going global" strategy, the long-term growth of these Chinese companies will be significantly higher than that of Western counterparts. About half of the future profit growth of many Chinese resource companies will come from overseas; Second, because of the advantages of international relations, Chinese companies are more likely to purchase resources from some emerging market countries, while Chinese companies face relatively small "national risks" in their operations in these markets; Third, the financing cost of Chinese enterprises is low; Fourth, Chinese resource companies have good performance in outbound M&As: 74% of outbound M&As of Chinese resource companies in the past four years have been considered by the market to enhance the company's value.
Sina statement: The content of this article is purely the author's personal view, only for investors' reference, and does not constitute investment advice. Investors operate accordingly at their own risk.
