Broader horizons

Chng at AT Kearney says FDI in China might be about to undergo some radical transition.

"I think foreign investment over the next 10 years is not going to come to China because of the labor costs since they are already more expensive than most parts of Asia," he says.

"I think you are going to see quite a lot of research and development investment because of the huge talent pool that now exists in China. Companies will set up their Asia research and development facilities in China and on the back of this research sell into the vast Chinese market. Whether FDI goes up, down or sideways also depends to what extent the China economy opens up to new sectors."

Loesekrug-Pietri at A Capital says many companies in Europe and elsewhere are happy to receive investment from Chinese companies since they believe it will give them access to the Chinese market.

His company advised Fosun International, China's largest private conglomerate, on acquiring a 7 percent stake in Club Med in 2010. The Shanghai-based company is now looking to take full control with Axa Private Capital subject to a Paris court ruling expected this month.

"The big thing with Club Med was that it was not just about getting Chinese tourists to go to Chinese resorts in Guilin or Yabuli but about them going to resorts in Bali, Mauritius and Cancun and capturing the Chinese market worldwide. This is why companies now want to align themselves to Chinese companies to reach the Chinese consumer globally."

As the Chinese economy grows, the significance of trends in both its inbound and outbound investment will have global implications.

Kobus van der Wath, founder and group managing director of The Beijing Axis, is one who believes Africa will still be a vital investment destination for China.

"China and the rest of Asia is a major source of capital, especially for the mining and energy sector. Africa can and must leverage Asia's rise to transform itself and extract capital for long term, well managed and mutually beneficial strategic relationships."

andrewmoody@chinadaily.com.cn

( China Daily Africa Weekly 02/21/2014 page1)