Environmental and Social Impacts of Chinese Investment Overseas

In Asia

June 1, 2016

By Huang Zhen

On June 5, China marks its second national “Environment Day,” first established as part of the revised Environmental Protection Law in 2014. Along with the increased focus on environmental issues at home, more and more attention is being paid to the social and environmental impacts of China’s investments abroad.

Outward foreign direct investment (OFDI) from China has exploded in the past 15 years, going from less than $3 billion in 2002 to $101 billion by 2013. According to a recent UNDP report, Chinese enterprises’ OFDI in 2014 totaled $123.1 billion across all industries, an increase of 14.2 percent compared with the previous year. Sector-wise, China’s FDI flowed mainly toward leasing and commercial services, wholesale and retail, financial sectors, construction, agricultural, and mining sectors. The latter three, by their very nature, can cause social and environmental concerns.

Marine sand is pumped by a ship at the commencement of "Colombo Port City" backed by China in Sri Lanka. Increasing attention is being paid to the social and environmental impacts of China’s investments abroad.

Marine sand is pumped by a ship at the commencement of “Colombo Port City” backed by China in Sri Lanka. Increasing attention is being paid to the social and environmental impacts of China’s investments abroad.

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