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11. Country-Risk Rating of Overseas Investment from China (2018)

Author:
CROIC-IWEP
Publication Date:
01-2018
Content Type:
Working Paper
Abstract:
China's outbound direct investment hit a new high in 2016, reaching $196.15 billion, making the country the world's second-largest overseas investor. The volume of its outbound direct investment increased by 34.7% year-on-year in 2016 and accounted for 13.5% of the world's total — the first time it exceeded 10%. Since 2003, when the Ministry of Commerce joined hands with the National Bureau of Statistics and the State Administration of Foreign Exchange to start releasing authoritative investment data annually, China's outbound direct investment has kept increasing for 14 consecutive years. From 2002 to 2016, the annual average growth of its outbound direct investment reached 35.8%. In 2016, China's outbound direct investment once again exceeded the foreign direct investment it received, making it a net capital exporter for two consecutive years. Meanwhile, its outbound direct investment stock hit $1.35739 trillion at the end of 2016, the 6th largest in the world, two notches up compared with in 2015. In 2016, China had the most overseas M&A deals in history in terms of both number and value of M&A deals. In the future, China is expected to bring out more of its investment potentials and build a win-win cooperative relationship with other countries following its economic transition and upgrading, rising competitiveness of Chinese enterprises in overseas markets and steady advancement of the Belt and Road Initiative.
Topic:
Economics, Foreign Direct Investment, and Investment
Political Geography:
China and Asia

12. China’s Relationship with Chile: The Struggle for the Future Regime of the Pacific

Author:
Evan Ellis
Publication Date:
11-2017
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Though superpower diplomacy dominated coverage of the Asia Pacific Economic Cooperation forum (APEC) leaders summit in November, China’s upgrading of a free-trade agreement with Chile served to highlight the strength of an economic and political relationship that it has built with the country, and the influential position Chile currently occupies in shaping Chinese engagement with Latin America.
Topic:
International Trade and Finance, Treaties and Agreements, Bilateral Relations, Infrastructure, and Foreign Direct Investment
Political Geography:
China, Asia, South America, and Chile

13. Chinese Investment in Critical U.S. Technology: Risks to U.S. Security Interests

Author:
Council on Foreign Relations
Publication Date:
10-2017
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Chinese firms, both private and state-owned, have in recent years invested billions of dollars in the U.S. technology industry, raising concerns that a powerful rival has gained or could soon gain access to sensitive and, in some cases, critical technologies that underpin American military superiority and economic might. At the workshop entitled “Chinese Investment in Critical U.S. Technology: Risks to U.S. Security Interests,” held in San Francisco, on July 18, 2017, CFR convened nearly thirty current and former government officials, academics, bankers, investors, and corporate executives to explore whether the large and growing early-stage Chinese investment in critical U.S. technology poses a threat to U.S. national security, and, if so, to outline policies that mitigate the risks of unbridled Chinese investment and to bolster U.S. competitiveness.
Topic:
Security, Science and Technology, Foreign Direct Investment, and Cybersecurity
Political Geography:
United States, China, Asia, and North America

14. Writing New Rules for the U.S.-China Investment Relationship

Author:
Jennifer M. Harris
Publication Date:
12-2017
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
Chinese outbound investment is on the rise, and much of it is finding its way into the United States. Be- tween 2010 and 2015, China’s foreign direct investment (FDI) inflows to the United States grew by an average of 32 percent annually.1 Within the past two years alone, Chinese foreign investment inflows to the United States increased four-fold, and available data suggests 2017 will see the second highest annual investment on record, after 2016.2 This is not a two-way street: the United States and other foreign investors do not enjoy similar open market access in China. China maintains a dizzying assortment of formal and informal barriers to for- eign investment—from outright restrictions and quotas to mandatory joint ventures, forced localization measures, and domestic licensing regimes. Despite years of negotiations, these barriers are, if anything, growing more cumbersome in many sectors. U.S. firms paint a darkening picture of the business climate they face in China. U.S. FDI in China has slowed considerably in recent years: after growing roughly 180 percent from 2002 to 2007 (albeit from a low baseline), U.S. FDI flows into China have declined since 2012.3 The one-way surge of Chinese investment into the United States comes against a backdrop of strategic mistrust between Washington and Beijing. Ongoing accusations of state-sponsored cyber predation of U.S. firms, Beijing’s increasing aggressiveness over territorial disputes, its systematic efforts to under- mine the U.S. alliance system in Asia, and mounting tensions over North Korea all contribute to a dark- ening mood in the U.S.-China relationship. And, like so much involving China, this investment is simply different. Rarely, if ever, has the United States seen an increase in investment of this magnitude—espe- cially from a non-ally and especially from one where the lines between state ownership and private own- ership are so inherently blurred. For all the concern surrounding Japanese investment in the United States in the 1980s—coming as it did amid fierce economic competition—those debates ultimately re- mained under the umbrella of the U.S.-Japan military alliance. All of this raises questions about whether the United States needs to tighten its stance on Chinese in- bound investment; proposals to that effect have bipartisan support in the Congress. The Donald J. Trump administration has signaled its desire for a tougher approach in its economic dealings with China, which U.S. businesses seem to welcome. One foundation for such an approach is the principle of reciprocity. Roughly two dozen sectors in China—construction, mining, banking, insurance, and so on—remain effectively off-limits to American investment, because the Chinese government protects its domestic companies through regulations and financial subsidies. Even in sectors that technically allow foreign investment, discriminatory industrial policies tilt the playing field in favor of Chinese firms. Until this changes, Washington would be justi- fied—even obligated—to limit Chinese investment in the U.S. market. However, U.S. policymakers do not have a consensus on what a policy of reciprocity would entail, and different policy interpretations could spell quite different economic and foreign policy consequences for the United States. The United States should aim for a version of reciprocity that allows it the flexibility to maximize pressure on the broad range of Chinese industrial policy concerns while leaving a clear route to negotiations. The United States should also encourage European and other Western countries, many of which are seeing similar increases in Chinese investment, to adopt this new approach.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, and Foreign Direct Investment
Political Geography:
United States, China, Asia, and North America

15. Unconventional Monetary Policy, Spillovers, and Liftoff: Implications for Northeast Asia

Author:
Marcus Noland
Publication Date:
11-2015
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
Unconventional monetary policy (UMP) has had predictable effects. How exit plays out is scenario-dependent. Quantitative easing has had the predictable effect of encouraging currency depreciation and some partner countries may have attempted to offset these exchange rate effects. Korea presents a particularly interesting case: it is relatively small and relatively open and integrated, in both trade and financial terms, with the United States and Japan, two practitioners of UMP. Authorities have acted to limit the won's appreciation primarily against the currency of China, not the US or Japan. Nevertheless, Korea's policy is a source of tension with the US. Under legislation currently being considered, the currency manipulation issue could potentially interfere with Korean efforts to attract direct investment from the US and create an obstacle to Korea joining the Trans-Pacific Partnership.
Topic:
Economics, International Trade and Finance, Political Economy, Monetary Policy, and Foreign Direct Investment
Political Geography:
Asia

16. China invests (somewhat) more in the world

Author:
Derek M. Scissors
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
New data published in the American Enterprise Institute-Heritage Foundation China Global Investment Tracker show that China continues to invest heavily around the world. Outward investment excluding bonds stood at $85 billion in 2013 and is likely to reach $100 billion annually by 2015. Energy, metals, and real estate are the prime targets. The United States in particular received a record of more than $14 billion in Chinese investment in 2013. Although China has shown a pattern of focusing on one region for a time then moving on to the next, the United States could prove to be a viable long-term investment location. The economic benefits of this investment flow are notable, but US policymakers (and those in other countries) should consider national security, the treatment of state-owned enterprises, and reciprocity when deciding to encourage or limit future Chinese investment.
Topic:
Security, Foreign Policy, Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment, and Sovereign Wealth Funds
Political Geography:
United States, China, and Asia

17. China needs to complement its "going-out" policy with a "going-in" strategy

Author:
Karl P. Sauvant and Victor Z. Chen
Publication Date:
05-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
China's rising outward foreign direct investment (OFDI) faces rising skepticism abroad. This is partly the result of the leading role of state-owned enterprises in her OFDI (and the fear that it serves non-commercial purposes), the speed with which this investment has grown, the negative image of the home country in some quarters, and the challenges it poses to established competitors. Moreover, Chinese multinational enterprises (MNEs) may not always keep in mind that host countries see FDI as a tool to advance their own development and hence seek maximum benefits from it.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
China and Asia

18. High Tech: The Next Wave of Chinese Investment in America

Author:
Daniel H. Rosen and Thilo Hanemann
Publication Date:
04-2014
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
WHILE CHINA STARTED INVESTING AROUND THE WORLD in the early 2000s, the first waves of Chinese overseas investment targeted mostly extractive mining activities in developing countries and resource-rich advanced economies such as Australia and Canada. Over the past five years, however, Chinese capital has begun to flow into non-extractive sectors in advanced economies, increasingly targeting technology- and innovation-intensive industries. Initially, the surge of Chinese outward foreign direct investment (OFDI) in the United States largely responded to opportunities in energy and real estate, but access to technology and innovation is now becoming an important driver. In the first quarter of 2014 alone, Chinese investors announced high-tech deals worth more than $6 billion, including the takeovers of Motorola Mobility, IBM's x86 server unit, and electric carmaker Fisker.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Political Geography:
China, America, Canada, Asia, and Australia

19. The China-EU BIT: The emerging "Global BIT 2.0"?

Author:
Wenhua Shan and Lu Wang
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Columbia Center on Sustainable Investment
Abstract:
Since China and the European Union (EU) announced their decision to negotiate a bilateral investment treaty (BIT) at the 14th China-EU Summit in February 2012, the two sides have engaged in two rounds of negotiations. If successful, it will be the first standalone EU BIT, a BIT between the world's largest developed economy and the world's largest developing economy, and will occupy a unique place in the history of BIT negotiations.
Topic:
Economics, International Trade and Finance, Bilateral Relations, and Foreign Direct Investment
Political Geography:
China, Europe, and Asia

20. Chinese global investment growth pauses

Author:
Derek M. Scissors
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Chinese foreign investment declined through mid-2014 for the first time since the financial crisis. By sector, energy draws the most investment, but a slump in energy spending means that metals and real estate have been more prominent so far in 2014. The United States has received the most Chinese investment since 2005, followed by Australia, Canada, and Brazil. China invests first in large, resource-rich nations but has also diversified by spending more than $200 billion elsewhere. Chinese investment benefits both China and the recipient nation, but host countries must consider thorny issues like Chinese cyberespionage and subsidies.
Topic:
Economics, Human Rights, International Trade and Finance, Terrorism, and Foreign Direct Investment
Political Geography:
United States, China, Canada, Asia, Brazil, and Australia