1. China’s global business footprint shrinks
- Author:
- Derek Scissors
- Publication Date:
- 07-2019
- Content Type:
- Special Report
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- China’s investment and construction around the world plunged in the first half of 2019 and is unlikely to return to 2016–17 levels in the foreseeable future. The principal cause is fewer large transactions by state-owned enterprises. These firms rely on foreign currency provided by Beijing for global activities, and hard currency may be rationed indefinitely. There are brighter spots. The raw number of investments held up better than transaction size. The private share of China’s global investment climbed, and the greenfield share rose sharply. Investment in the Belt and Road Initiative outperformed that in traditionally favored rich economies such as Australia. Chinese investment in the US has been minor in size for two years. Policymakers should shift focus from screening to unwanted activity by Chinese firms, including intellectual property theft and other criminal acts. Enforcement targeting specific firms is superior to tariffs but should go beyond largely empty steps taken to date.
- Topic:
- Foreign Policy, Economy, Business, and Investment
- Political Geography:
- China, Asia, and United States of America