China to record a surge in outbound investments
ACCORDING to a new report by a leading British law firm, Linklaters, the Chinese outbound investment flow is forecast to reach US$ 1.5 trillion over the next 10 years as key Chinese policies will underpin future overseas investment.
China’s outbound investment is set to grow 70 per cent during the coming decade, from a total of US$ 880 billion from 2007 to 2016.
The report identified key Chinese policies, including ‘Made in China 2025’ and ‘Belt and Road’ as major driving forces to the continued growth in Chinese outbound deals.
However, it warned that Chinese acquirers should approach deals strategically in the face of regulatory tightening overseas.
The ‘Made in China 2025’ is a roadmap released by the State Council in 2015 as a guide to boost the country’s industrial manufacturing.
The programme has seen steady progress in industrial capability, smart manufacturing, innovation, as well as product quality and branding.
The ‘One Belt, One Road’, which is also called the ‘Belt and Road’, is China’s globe-spanning investment programme proposed in 2013 to build a trade and infrastructure network linking Asia, Africa and Europe along ancient Silk Road trade routes.
The plan is being unfurled as the Chinese economy shifts from being a manufacturing focused economy to services and consumption.
The report said such initiatives mean the high level of outbound investments would likely focus on sectors such as energy infrastructure and high- end technology and electronics, which may be seen by host governments as “strategic” to national security or national interest.
Under the leadership of President Xi Jinping, who observers say is the most powerful leader in the Chinese Communist Party in decades; China is also trying to buy its influence globally via its massive investments.
Under President Xi’s vision of a ‘China Dream’, the country is already showing rejuvenated growth in its economy.
Besides that, China’s economy, politics and geopolitical influence are showing tangible results.
Foreigners are eyeing the country’s economic growth and development.
From here, China is expected to have more positive and stable growth in the coming years as its economic incentive has a pushed its position to being very influential power in politics and geopolitical issues as well geostrategic interests.