The United States used to be the most popular option for Chinese investors. Now, the top choice is China. Asian economies are growing and Singapore is currently the leading destination for Chinese investment of the overseas type. This information comes from a report which was released on December 7, 2017.
The report pinpointed America’s drop to second place. Hong Kong is currently in third place, followed by Malaysia and Australia. The report is the work of EIU (Economist Intelligence Unit). The report covered many different facets of industry, including healthcare, telecommunications, energy, financial services, automotive and consumer goods.
The report stated that Singapore and Malaysia are currently the most appealing destinations for Belt and Road Initiative-related investments, because these two countries provide good opportunities which don’t come with a lot of risk.
Chinese firms are making an effort to establish dominance globally in a variety of areas. According to the EIU report, they are working towards dominance in renewable energy, fintech and electric vehicle niches and this desire for dominance is driving direct investment efforts of the overseas type.
Big Internet players, including Alibaba and Tencent, were listed in the report as firms which are investing in electronic commerce startups all through Asia.
This new report was the first since 2015. In the previous report, EIU researchers discovered that markets which are developed are the most appealing to Chinese investors. However, economies which are developing have actually provided the most sizable gains. In 2015, Singapore ranked number-two. The USA was the top position and Australia was in third place. In 2015, Hong Kong was ranked seventh and Malaysia was ranked twenty-first.
China’s BRI is Changing Things
It’s believed that better rankings for the 2017 report, for nations such as Iran, Thailand, Kazakhstan and Malaysia are the result of China’s BRI, which provides Chinese firms with incentives to invest in firms that are along the route.
The drops in rankings for certain nations may be attributed to trade issues and foreign relations problems with China and other nations, including India and the United States.
Overseas Direct Investment by China is Decreasing
The Ministry for Commerce is China has reported that direct overseas investment (non-financial) in BRI nations went up to 18.2 percent, to total 14.8 billion dollars (during 2015). However, the level of investment has fallen since then, by two percent in 2016. This year, investment is still down.
Overseas direct investment by China, to BRI nations, has dropped by 13.7 percent over the past nine months, to September of 2017.
While the prospects for overseas direct investment by China are a bit dimmer than they used to be, most experts anticipate that the drop will be a temporary one. Analysts, such as Dan Wang from EIU China, are still psyched up about the way that corporate China is expanding internationally via investment. So, there is still a lot to be excited about and look forward to. Investment surged to very high levels and a bit of a downturn is normal.
About the Author
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