Chinese interest in snapping up investments abroad shows no sign of slowing down, according to the latest report by the United Nations Conference on Trade and Development (UNCTAD).

Chinese companies, in many cases led by state-owned enterprises, were responsible for some $183 billion (163 billion euros) of foreign direct investment (FDI) in 2016, a 44 percent increase over the previous year, UNCTAD figures released on Wednesday said.

The rise saw China rise from fifth to second place in the ranking of the world's largest foreign investors, behind the US.

The report said China also leads the top prospective investor countries in 2017, followed by the US, Germany and Britain.

China's huge spending spree came before the Beijing government imposed tighter capital controls for three months earlier this year to shore up the currency and encourage more inward investment. The controls were relaxed in April.

Germany's investment appetite falls

Perhaps surprisingly given the country's current economic boom, FDI by German companies shrank from $93 billion to $35 billion during the same period. Irish and Swiss companies also decreased their exposure overseas.

Read more: Chinese investments in EU - indispensable yet worrisome

China's investment in German robotics firm Kuka last year raised eyebrows

Overall global FDI fell 2 percent in 2016 to $1.75 trillion, in part due to a fall in investment flows to developing economies including to Asia (excluding China and India), Latin America and Africa. But UNCTAD said many emerging economies would see a return of investment flows in 2017, except Latin America.

On the other hand, industrialized nations saw direct investment grow 5 percent last year to $1 trillion.

The US, China and India remain the top prospective FDI destinations, with rises also predicted this year for much of South East Asia, including Indonesia, Thailand and the Philippines.

Read more: China's Southeast Asia investments - a blessing or a curse?

Investment into Africa was only expected to rise slightly in 2017 despite what many economists say are the huge opportunities there.

2017 investment to rise

Despite predicting a recovery in global FDI this year with flows expected to reach almost $1.8 trillion, UNCTAD said they would remain well below their 2007 peak. The report cautioned that geopolitical risks, possible changes to cross-border taxes and policy uncertainty could hamper the recovery in FDI flows.

The UNCTAD report also described how digitization was a huge opportunity for poorer and middle-income countries, but often required considerable investments from abroad.

It called for further flows to be committed to digital projects in developing countries to help local entrepreneurs get access to international markets.

Money from China and Africa's renaissance on rails Kenya opens Madaraka Express railway The Chinese-built railway linking the port city of Mombasa with the capital, Nairobi, is Kenya's biggest infrastructure project since independence. The passegner train, dubbed the Madaraka (Freedom) Express, can carry 1,260 passengers and replaces the so-called "Lunatic Express" - a railway built by colonial Britain more than a century ago, which was known for lengthy delays and breakdowns.

Money from China and Africa's renaissance on rails Connecting East Africa About 25,000 Kenyan and 3,000 Chinese workers took part in the construction of the 472-kilometer route between Mombasa and Nairobi. China financed about 90 percent of the construction costs, while the Kenyan government is providing the remaining 20 percent. The newly opened railway is the first phase of a project to connect Kenya's landlocked neighbors Uganda, Rwanda and South Sudan to Mombasa.

Money from China and Africa's renaissance on rails The fast train from Abuja to Kaduna Since July, 175 kilometers (116 miles) of rail have connected Nigeria's capital, Abuja, to Kaduna state in the north. It cost about 800 million euros ($896.5) to construct. The Export-Import Bank of China provided approximately 450 million euros.

Money from China and Africa's renaissance on rails The head of state on tracks Nigerian President Muhmmadu Buhari was a special guest on the new train's maiden trip. A ticket for the two-hour, 40-minute journey goes for the equivalent of 3 euros for economy class and 4.25 euros for first class.

Money from China and Africa's renaissance on rails City rail in Addis Ababa The first light rail line in Ethiopia's capital went active in 2015. It was built by the China Railway Group - also with funding from China EximBank. The Chinese will be involved in the operation and maintenance of the light rail system until 2020. Then the Ethiopian Railways Corporation should take over.

Money from China and Africa's renaissance on rails Railway museum in Livingstone Rail transport in Africa goes back a long way. In 1856 the route between Alexandria and Cairo was opened. These steam engines are said to have been running from the beginning of the 20th century to 1976 in Zambia. They are exhibited at the Railway Museum in Livingstone.

Money from China and Africa's renaissance on rails Dilapidation at the end of colonial rule A number of railway lines were constructed by the colonialists in Africa. The trains transported raw materials to the coast, where they would then be shipped to Europe. Many of these routes are dilapidated. The relics in the photo belong to the original railway line between Swakopmund and Walvis Bay, built in 1914 but replaced in 1980.

Money from China and Africa's renaissance on rails Africa's rail network In a 2015 statement, the African Development Bank emphasized the importance of the railway for the continent. It allows for the cheap transportation of goods and relieves urban congestion, according to the bank. The report also criticizes the poor condition of the rail networks. They mainly stretch across the north and the south and are often not linked to each other.

Money from China and Africa's renaissance on rails Will closed stations be reopened? As economies grow in many African countries, a new emphasis has been placed on transport improvements. If China and other backers continue to invest, deserted train stations such as this one in Addis Ababa could function again.

Money from China and Africa's renaissance on rails Going all the way in South Africa The Gautrain regional rail network connects Pretoria and Johannesburg with the largest airport in Africa. It is to be expanded from the current 80 to 230 kilometers in the next 20 years. With about 21,000 kilometers of track, South Africa has by far the largest rail network in the continent. Sudan has 7,300 kilometers, and Egypt has 5,100 kilometers.

Money from China and Africa's renaissance on rails Fast trains from France in Tangier The continent's highest-speed trains are planned in the north. The first of 12 French TGV trains were delivered last June. The journey between Tangier and Casablanca should take 2 hours 10 minutes at a speed of up to 320 kilometers per hour, instead of the now 4 hours 45 minutes. The line will later extend to Algeria and Tunisia. Author: Aarni Kuoppamäki



mm/hp (dpa, UNCTAD)