Investment promotion strategies focus on three main elements the country, the investor and the investment.

In the case of China, OFDI approval procedures have been simplified and the Investment Promotion Agency, established under the Ministry of Commerce, provides support in helping Chinese enterprises to invest abroad.

The creation of a positive image of the host country to investors is considered the first step in investment promotion.

One answer lies in the fact that China s FDI policy over the past 30 years has crowded out Chinese investors from high return projects, forcing them to settle for less lucrative projects. But there are still potential investors who cannot find any suitable investment opportunities in China, generating excess resources, which in turn are invested in US government securities.

These flows, mainly foreign direct investment, are, however, concentrated in a few large developing countries, while flows to other regions have been in steady decline.

When it comes to South South investment, the focus should be on small and medium size foreign investors, who often have different needs from those of traditional home countries.

The Centre helps countries prepare investment projects for international financing by the World Bank and other development banks.

China has invested in iron mines and steel mills in Peru and in oil in Angola and the Sudan.

As at 31 March 1998, funds were invested in 51 countries, including direct investments in 27 developing countries, and were in 33 different currencies.

He noted that during 1994 and 1996, FDI represented 10 per cent of the total of all investment flows to developing countries, and 40 per cent of the total of foreign investments in Latin America and the Caribbean.

China s Investment Addiction

In 2002, services accounted for about 55 per cent of the total stock of inward FDI in developing countries and some 85 per cent of outward FDI stock for developing countries.

China is providing investment insurance and tax breaks to companies that invest abroad.

There is also a severe shortage of investment, both local and foreign, in many developing countries.

Indian SMEs invest in both developed and developing countries, but the software OFDI is more inclined to favour the developed region.

From low levels of outward FDI, a number of developing countries are now emerging as dynamic sources of FDI, not least in other developing countries.

Hong Kong (China) invests mainly in Malaysia, Singapore and Thailand.

Investment in developing countries

Investment in developing countries

Seven of the 10 were the same in both 1991 and 1997 (see table 1).

Fixed asset investment is the most important engine of China s growth. As a developing country with annual per capita income of less than 5,000, there is still significant room for China to increase its capital stock.

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As the preferred destination for Chinese enterprises to enter Germany, Nordrhein Westfalen has attracted more than 800 Chinese enterprises to invest there, and the local government expected Chongqing entrepreneurs to go to this popular region for investment to feel the local investment environment.

It should also disseminate information on country experiences related to FDI policies and the interaction between foreign and domestic investment.

In the 2004 data, most investment was concentrated in the area of an electronic United Nations, although other areas also show significant investment, as illustrated in figure 7.

Trade among GSTP members is already close to 2 trillion, or about 55 per cent of the international trade of all developing countries.12 The UNCTAD annual World Investment Report tracks global investment flows, including those to, from and among developing countries.

An expert stated that Republic of Korea SMEs account for a significant percentage of OFDI by Korean firms. Most of their investments are in neighbouring countries.

Such programmes facilitated further investment and supported investors' activities in developing countries and countries with transition economies.

The motives for OFDI by firms from developing countries do not differ from those of developed country firms, although developing country firms have a greater tendency to invest in neighbouring countries and in other developing countries.

39. Of the three forms of private capital flow (loans, FDI and portfolio equity), FDI and portfolio equity investments are more relevant in the present context of African economies.

In terms of investment promotion strategies, investment promotion agencies (IPAs) are mainly focused on investors based in developed countries.

Its stock of foreign capital will increase steadily as foreign firms invest and reinvest in China. FDI in the country will continue to garner substantial returns, partly owing to local government hospitality.

Investment promotion agencies for inward FDI and OFDI, both in developing and developed countries, could coordinate their efforts.

In 2008, US corporations gained a 33 return on their investments in China, while other multinationals got a 22 return. By contrast, the return on US government securities, which form the bulk of China s foreign assets, was next to nothing.

Whereas the average return on FDI in China was 33 for American firms in 2008, the average return on China s investment in US government securities was a mere 3 4 . So, why does China invest its savings so heavily in low return US government securities, rather than in high return domestic projects?

While China has attracted a large amount of foreign direct investment, it has bought an even larger amount of US government securities. Whereas the average return on FDI in China was 33 for American firms in 2008, the average return on China s investment in US government securities was a mere 3 4 .

Some, like Singapore s Government Investment Corporation, prefer passive and diversified investments with no controlling stake in companies. And China, when it took a 10 stake in the US private equity group Blackstone, eschewed any voting rights in the company s management, perhaps as a way of keeping US financial regulators happy.

She recognized that even in countries with very liberal policies on FDI a number of industries remained closed to the latter.

As stressed by UNCTAD in various issues of the World Investment Report, policies matter not only for attracting FDI but also for benefiting from it.

2.To what extent has the fact that firms from an increasing number of developing countries are becoming outward investors, and that an increasing number of developing countries conclude BITs with other developing countries, influenced the contents of BITs?

To provide care for persons living with HIV.

Is there evidence that foreign investors would not consider a host country for investment unless that country had concluded a BIT with their home country?

Chinese TNCs invest not only in neighboring countries, but also in Africa (Zambia, South Africa) and Latin America (Peru, Mexico, Brazil and, more recently, Chile).

The Government of the Republic of Korea is supporting OFDI through deregulation of foreign currency management and provision of information on the investment environment of host countries in the context of bilateral investment treaties and free trade area arrangements.

This guy runs the China Investment Corporation.