ABSTRACT
In recent years, along with China’s economic growth, the outward investments from China have soared. While the stock of Chinese outward investments amounted to only US$4.5 billion in 1990, the figure had reached US$28 billion by 2000 and US$46 billion by 2005 (UNCTAD, 2006: 113). In 2006, China’s outflows increased by 32 per cent to US$16 billion, and its outward investment stock to US$73 billion. This expansion involves considerable investment in other developing countries. The importance of Chinese FDI is expected to continue to grow in the future. According to the survey by the Foreign Investment Advisory Service/Multilateral Investment Guarantee Agency (FIAS/MIGA), 58.9 per cent of Chinese multinational enterprises (MNEs) taking part in the survey had concrete plans to continue to expand abroad, and 12.9 per cent had at least an intention to expand abroad (FIAS/MIGA, 2006: 19). Furthermore, as Shaoming Cheng notes, a future stronger Chinese currency will greatly enhance the purchasing strength of Chinese firms in international mergers and acquisitions and therefore lead to a rise in outflows of Chinese FDI (Gugler and Boie, this volume, Chapter 2). In addition, the competitive pressure in the domestic Chinese market is expected to accelerate, and will continue to push Chinese enterprises to globalize. For these reasons two free trade agreements (FTAs) recently entered into force (the ChinaChile FTA on 1 October 2006, and the China-Pakistan FTA on 1 July 2007). The Agreement on Trade in Services of the China-ASEAN Free Trade Area also entered into force on 1 July 2007. Three further agreements (with Australia, the Gulf Cooperation Council and Iceland) are being negotiated while the ChinaNew Zealand FTA entered into force on 1 October 2008.
