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New patterns in China's outbound direct investment


03-27-2017 08:44 BJT

Full coverage: 2017 Boao Forum

(Source: CGTN)

New patterns have started to show in China's outbound direct investment. During a session at this year's Boao Forum for Asia conference, some delegates said they were inspired by China's rapidly growing economy, and that the country has changed from an investment destination to an active overseas investor.

From an investment destination, to an active overseas investor. Last year, Chinese firms invested 1 point 1 trillion yuan, around 170 billion US dollars, overseas. That represents a 44 percent increase on the previous year.

One of the most aggressive buyers of overseas assets is Anbang Insurance, which has spent over 30 billion US dollars in the last 2 years, buying luxury hotels, insurance companies and other properties. Unlike most Chinese companies, which only inject capital and leave business operations to existing overseas management teams, Anbang gets involved with strategic decisions and makes an impact with the Chinese management style.

"Anbang prioritizes our customers, and we brought this concept to a Dutch company that we bought. At the beginning, the claim settlement process took about 2 months, but after our improvements with the help of a payment app and Wechat, we have shortened that process to 16 minutes, and more recently to 10," Wu Xiaohui, chairman of Anbang Insurance Group, said.

But the approach Anbang took to its overseas operations is by no means easy to copy. For the majority of companies, a safer and more sustainable approach starts with smaller roles, and gradually evolves.

"First we can become small shareholders by making investments, and then gradually attract the talent to China. I think this is a more sustainable path. Because the goal for many Chinese companies to make overseas investment is to sharply hike the market value and I think this is not sustainable," Zhang Wei, chairman of  China Create Asset Management Group, said.

Over the past few years, China has experienced explosive growth in outbound investment, coupled with this boom has been an "irrational" tendency in some sectors. For 2017, China's government has vowed to carry out more efforts to guide overseas investment for a more rational and balanced environment.

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