Canada is China’s ninth choice when it comes to investing in foreign markets, according to the results of an Asia Pacific Foundation of Canada survey released November 4.
In a survey of approximately 1,000 Chinese companies, 6% chose Canada as country of choice for outward foreign direct investment (OFDI). The United States was in first place with 35% and Germany was in second place at 16%.
The Asia Pacific Foundation said Chinese investment in Canada has grown considerably since 2006, but the dollar value of those investments remains small compared with investments in Canada by other countries. Total Chinese OFDI in Canada was $12 billion in 2012, representing 2% of total FDI in Canada.
Total FDI from China to the United States amounted to C$326 billion in 2012.
The main drivers for deciding where to invest include preferential investment policies in the host country and global policy-related incentives.
Of all Chinese investment in Canada, which is dominated by Chinese state-owned enterprises, most of the focus is on Canadian energy and resource projects.
“Despite recent large inflows of Chinese investment, we cannot take for granted that Canada is an attractive destination for Chinese companies, whether state-owned enterprises or private companies,” said Yuen Pau Woo, president and CEO of the Asia Pacific Foundation of Canada.
“The scale of Chinese outward investment in the coming decade will be massive. Canada has to compete for its share, and this will require concerted effort from different levels of government as well as from the business community.”
Other findings of the survey include:
- respondents report higher levels of optimism about the global economy in 2014 than they were in 2013;
- respondents stated that a low level of international cooperation was the biggest obstacle facing their international businesses; and
- two-thirds of responded identified the availability of international market information as the most needed service when it came to OFDI.
