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China's Outward Direct and Portfolio Investments

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  • Hung‐Gay Fung
  • Qingfeng Wilson Liu
  • Erin H. C. Kao

Abstract

This paper analyzes developments and trends related to China's outward direct and financial investments by examining Chinese firms’overseas acquisitions, China's holdings of US Treasury securities, and the recently formally launched Qualified Domestic Institutional Investor programs. Strategies should be developed to reach optimal decisions for both direct and portfolio investments. We argue that China should have a longer‐term view for both direct and portfolio investments, enabling China to become the leader in Asia while maintaining its sustainable growth objective. China should invest heavily in the development of the Asian bond market and the Asian Currency Fund when making both portfolio and direct investment decisions.

Suggested Citation

  • Hung‐Gay Fung & Qingfeng Wilson Liu & Erin H. C. Kao, 2007. "China's Outward Direct and Portfolio Investments," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(6), pages 53-68, November.
    • Handle: RePEc:bla:chinae:v:15:y:2007:i:6:p:53-68
    DOI: 10.1111/j.1749-124X.2007.00092.x
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    References listed on IDEAS

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    1. repec:fip:fedgsq:y:2005:i:mar10 is not listed on IDEAS
    2. Zhang, Jian & Fung, Hung-Gay, 2006. "Winners and losers: Assessing the impact of Chinese Yuan appreciation," Journal of Policy Modeling, Elsevier, vol. 28(9), pages 995-1009, December.
    3. Jian Zhang & Hung‐Gay Fung & Donald Kummer, 2006. "Can Renminbi Appreciation Reduce the US Trade Deficit?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(1), pages 44-56, February.
    4. Yanying Zhang & Gaiyan Zhang & Hung-Gay Fung, 2007. "The Prospects for China's Free Trade Agreements," Chinese Economy, Taylor & Francis Journals, vol. 40(2), pages 5-35, April.
    5. Ben S. Bernanke, 2005. "The global saving glut and the U.S. current account deficit," Speech 77, Board of Governors of the Federal Reserve System (U.S.).
    6. Injoo SOHN, 2007. "East Asia’s Counterweight Strategy: Asian Financial Cooperation and Evolving International Monetary Order," G-24 Discussion Papers 44, United Nations Conference on Trade and Development.
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    Cited by:

    1. Tolentino, Paz Estrella, 2010. "Home country macroeconomic factors and outward FDI of China and India," Journal of International Management, Elsevier, vol. 16(2), pages 102-120, June.

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