Outbound investment surges in Q2

The country's outbound direct investment (ODI) surged in the second quarter amid an economic slowdown with Europe as the leading destination for Chinese investment, a report by a private equity fund showed Tuesday.

China's ODI accelerated by 67 percent from a year earlier to reach $24 billion in the second quarter of 2012, Beijing-based A Capital said in its quarterly report.

Europe is identified as the top destination for Chinese companies, with investment in Europe doubling in the second quarter from a year earlier to reach $5 billion.

"The strong acceleration of ODI occurs at a time of slowdown in China, showing the need to go up the value chain," the report said.

By sector, resources still dominated outbound investments, accounting for 53 percent of all deals in the quarter.

Industrial deals also increased in the period, accounting for 95 percent of all non-resources deals.

"We can see that Europe's economy is structurally complementary to the Chinese one, and this should increase even more with the Chinese rebalancing toward more consumption and sustainable development," Andre Loesekrug-Pietri, founder and CEO of A Capital, told the Global Times.

"Sectors like environmental technologies, automotive, consumer brands, new materials are areas where many world leading companies and industrial clusters are in Europe - and these are areas where Chinese firms need to go up the value chain," he said.

China's ODI grew at a slower pace of just 8.5 percent year-on-year in 2011 compared with a 21.7 percent year-on-year growth in 2010, with the outward investment in the financial sector dropping sharply, government data released last month showed.

"The European debt crisis indeed offers Chinese companies good business opportunities, making it cheaper to acquire assets and invest abroad. Chinese companies are increasingly interested in investing in the real economy abroad instead of speculative investment in financial sectors," He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times.

"As China's economy continues to slow, it is becoming more difficult for Chinese capital to find good projects to invest in domestically, and the excess of Chinese capital has to set its eyes on good projects abroad," Zhao Yongsheng, a visiting scholar at the Institute of European Studies of Chinese Academy of Social Sciences, told the Global Times Tuesday.

The Ministry of Commerce said China aims to achieve $150 billion of ODI by 2015 with an average annual growth of 17 percent between 2011 and 2015.

Despite slower ODI growth in 2011, China is well on track to achieve its annual ODI growth goal between 2011 and 2015, Shi Ziming, an official with the ministry, said last month.