26 Jun 2015
China to become world’s biggest overseas investor by 2020 - FT
FXStreet (Mumbai) - China will become the world’s biggest cross-border investor by the end of this decade, with global offshore assets tripling from $6.4tn presently to nearly $20tn by 2020, according to new research.
While much of the total will be in the form of foreign exchange reserves and portfolio investment, a growing share will come from direct Chinese investment in developed western countries, according to a joint report by the economic research firm Rhodium Group and the Berlin-based Mercator Institute for China Studies.
Based on the historical experiences of other countries, China’s global stock of outbound foreign direct investment (OFDI), which includes investing in corporate mergers, acquisitions and start-ups, will grow from $744bn to as much as $2tn by 2020.
The report’s projections are valuable because official cross-border OFDI statistics from China and recipient countries are widely seen as being of poor quality and do not give an accurate picture of real investment flows.
In barely a decade, Chinese OFDI has gone from virtually nothing to more than $100bn year, launching it into the top three exporters of direct investment globally.
While early Chinese investments focused on energy and natural resource assets in developing countries, investors are increasingly looking to the US and Europe for fresh opportunities.
While much of the total will be in the form of foreign exchange reserves and portfolio investment, a growing share will come from direct Chinese investment in developed western countries, according to a joint report by the economic research firm Rhodium Group and the Berlin-based Mercator Institute for China Studies.
Based on the historical experiences of other countries, China’s global stock of outbound foreign direct investment (OFDI), which includes investing in corporate mergers, acquisitions and start-ups, will grow from $744bn to as much as $2tn by 2020.
The report’s projections are valuable because official cross-border OFDI statistics from China and recipient countries are widely seen as being of poor quality and do not give an accurate picture of real investment flows.
In barely a decade, Chinese OFDI has gone from virtually nothing to more than $100bn year, launching it into the top three exporters of direct investment globally.
While early Chinese investments focused on energy and natural resource assets in developing countries, investors are increasingly looking to the US and Europe for fresh opportunities.