United Nations officials: Capital flight has indeed occurred in China

United Nations officials: Capital flight has indeed occurred in China “Capital flight has indeed occurred in China.” In the June 26 issue of “2…

United Nations officials: Capital flight has indeed occurred in China. "Capital flight has indeed occurred in China." At the press conference of the "2013 World Investment Report" on June 26, Liang Guoyong, economic affairs officer of the Investment Department of the United Nations Trade and Development Organization, said so. According to the 21st Century Business Herald, according to the report that day, global foreign direct investment inflows fell by 18% in 2012 to US$1.35 trillion, of which China's foreign investment fell by 2%. Previously, China's foreign investment (FDI) inflows increased by 8% in 2011, reaching US$124 billion, ranking second in the world, and has remained the first among developing countries for 20 consecutive years, second only to the United States. China's decline in foreign investment in 2012 may be an inflection point in the decline of global foreign direct investment. According to the above-mentioned report, direct investment inflows, especially to developed countries, fell by 32% in 2012 to US$561 billion, close to the lowest level in the past decade. "It can be seen that multinational companies in developed countries have a wait-and-see attitude towards new investments and are reorganizing their overseas investments through asset restructuring, divestment and other methods." said the above report. Capital flight appears. Capital flight can generally be seen from hot money. For example, if the monthly increase in foreign exchange reserves is negative after subtracting the trade surplus, foreign direct investment, and part of the interest income, it is generally considered that there is an outflow of hot money. The State Administration of Foreign Exchange once found that the foreign exchange reserves formed by transactions in 2012 increased by US$98.7 billion. After deducting four relatively stable trade and investment projects, namely import and export surplus, net inflow of direct investment from non-financial sectors, overseas investment income and overseas listing of domestic enterprises, the difference was negative by more than US$320 billion. However, the State Administration of Foreign Exchange believes that it cannot be concluded that more than US$320 billion was withdrawn from China in 2012 due to hot money outflows or capital flight. However, this reduction in hot money does have an increasing trend. The above-mentioned United Nations report believes that the reasons for the outflow of capital in China are related to the adjustment of China's economic structure and the upgrading of industries, and the corresponding changes in the structure of foreign direct investment flowing into China. Zhan Xiaoning, Director of Investment at the United Nations Trade and Development Organization, pointed out that due to rising production costs and a weak export market, some foreign companies have also begun to withdraw from China. "Especially labor-intensive low-end manufacturing industries such as clothing and footwear have begun to move their production bases from China to low-income countries in Southeast Asia." He said. The above-mentioned report pointed out that despite the weak momentum of the general environment, China's FDI also declined for the first time in many years. In 2012, the amount of foreign investment attracted by China fell by 2%, which was relatively stable compared with the global decline rate of 18%. However, as Federal Reserve Chairman Ben Bernanke hinted that quantitative easing will be terminated by the middle of next year, a large amount of investment hot money has a tendency to flow back. Data show that in a week in early June, more than US$5 billion of capital flowed out of emerging market countries, and capital flight may appear in China. Previously, Shen Danyang, spokesperson of the Ministry of Commerce, pointed out that companies currently investing in China are still optimistic about China's investment environment and will continue to expand investment in China. China's FDI faces challenges. Data from the Ministry of Commerce previously showed that from January to December 2012, China's actual use of foreign investment (FDI) amounted to US$111.72 billion, a year-on-year decrease of 3.7%. This is the first annual decline since 2009. The above-mentioned report believes that China’s foreign investment fell by 2% in 2012. Liang Guoyong pointed out that this difference in data may be caused by different statistical calibers. Zhan Xiaoning, Director of Investment of the United Nations Trade and Development Organization, pointed out that China needs to participate more effectively in global value chain competition. On the one hand, China should further improve the quality and level of attracting foreign investment and introduce more foreign investment into high-end manufacturing and service industries with high knowledge and skills. More urgently, "China should actively adjust its original 'going global' model and establish an overseas investment strategy centered on establishing China's own global value chain," he said. The above-mentioned report believes that although China's FDI declined in 2012, there were also bright spots. For example, although China's foreign investment fell by 2% in 2012, its base remained at a high level of US$121 billion, second only to the United States globally. The investment report pointed out that among the top five investment host countries that multinational companies are optimistic about, China ranks first. The report also predicts that from 2013 to 2015, China's total direct foreign investment inflows may surpass the United States and become the first in the world. The United Nations Trade and Development Organization’s optimistic estimate of China in the coming years is not unfounded. Data also show that China's overseas direct investment is even more eye-catching. In 2012, China's overseas direct investment reached a historical record of US$84 billion, making it the third largest foreign investor after the United States and Japan. A survey of investment promotion agencies in various countries shows that China is listed as the most promising source of foreign direct investment. The above-mentioned report believes that in the next step, China needs to use cluster investment instead of previous point-based and dispersed foreign investment to promote Chinese manufacturing enterprises to extend the industrial chain overseas through investment, trade and non-equity models (such as contract production, etc.), establish its own regional and global industrial chains, and allocate and utilize resources in various places on a global scale most effectively.