[MUSIC] In recent years, China's outbound foreign direct investment has been increasing rapidly. In fact, over the past decade, the rate of increase of outward FDI has actually been much faster than the rate of increase of inward FDI. So that the outward FDI has just recently passed the inward FDI. Where is all of these funds going from China to other countries? If you look at the official breakdown from government statistics, Hong Kong, again, is the dominant destination just as it was the dominant source of FDI. Now, a lot of these funds may not stay in Hong Kong. They may be reinvested to projects in other countries. So we're not completely sure where are all of FDI coming out of China is, in fact, ending up. We can see that among the FDI not going to Hong Kong, the destinations are quite diverse. There's been a lot of talk about China's investment in places like Africa. That's actually still fairly modest. There's a big chunk of Chinese outward investment going to Europe, the United States, and other Asian countries, as well. What about the industrial breakdown of the outbound FDI? What sectors are Chinese firms investing in? Well here, again we see it's quite diversified. Mining and manufacturing have received a lot of attention, but those are actually quite modest as a share of all of the outward FDI. There's quite a lot that is going to service sector industries, such as wholesale and retail trade, financial intermediation, and leasing and business services. Now of course there may be a lot of FDI that's not being officially registered and is leaving the country to start ventures in other places. And that type of investment is still relatively undocumented. So just to sum up very briefly, some of the key features of outbound FDI. Number one, it's been increasing rapidly. Number two, a lot of these outbound FDI have included mergers and acquisitions where Chinese companies are acquiring, by purchasing, other companies in other countries. Especially in advanced countries when they want to perhaps purchase a company that has some technology or expertise that they find advantageous. This is much less the case for inward FDI. Third, most of the officially recorded outbound FDI is going through Hong Kong, as we just saw. And fourth, it's very diversified in terms of the economic sectors that are being invested in. Now recently starting in 2013, China also announced a major outward-oriented initiative called One Belt One Road, where China seek to establish much closer ties to a set of countries lying along the Silk Road Economic Belt and the Maritime Silk Road. So, mostly neighbors of China, but extending to areas that are somewhat peripheral. This includes as many as 60 countries now. And China is making a major effort to promote greater ties, and make investments in infrastructure to promote trade and economic interactions with those countries. So the stated objectives of the One Belt, One Road initiative include policy coordination at the government level, facilities connectivity, meaning building up port facilities and other infrastructure that will promote trade and investment between countries. Reducing barriers to trade, both in terms of reducing the cost of moving goods, but also removing trade barriers. Also establishing better financial integration, and there have been some new financial institutions set up to help support investments in the One Belt, One Road initiative, including the Asian Infrastructure Investment bank, BRICS New Development Bank, Silk Road Fund. And finally the initiative seeks to build closer people to people ties through cultural exchanges, training activities where officials and scholars from the one belt one road countries can come to China to learn more about China's economic development experience, etc. Here is a map that shows all of the countries that are part of the One Belt One Road Initiative. It accounts for actually a fairly large chunk of the world's economic activity. Now, there are a number of questions that you might have about China's outbound FDI that merit further discussion. Some of them include, why has there been such a rapid increase of this outward FDI from China in recent years? Does it mean that there are no longer profitable opportunities within China, or is there something that is synergistic about the goals of this outward FDI? What has been the government role and the role of state-owned enterprises in outbound FDI? Has it been driven by security concerns, the need to feel safe about access to energy resources, or mining resources, etc. Can Chinese FDI actually catalyze development in other poor countries, just as FDI coming into China had played an important role in supporting growth in China? And finally, what will be the economic impact of the One Belt One Road initiative? And to take up these questions and discuss them in further detail, we will have a panel discussion with two very knowledgeable experts on this topic.