Misunderstanding buyouts
China remained the third largest investor in the world, after the United States and Japan, and its outward direct investment rose to $128 billion in 2015, up 4 percent year on year, according to the UNCTAD’S report.
Zhan said that China plays an exemplary role in supporting Africa through heavy investment and trade promotion. Take Tanzania for example. China is the second largest investor in Tanzania, with more than 500 Chinese businesses in the country. China’s investment in Tanzania rose to more than $4 billion in 2014.
“With an increasing number of Chinese enterprises investing overseas, China has thus become a major foreign capital source for some developed countries,” said Zhan, adding that as China continues to push forward the Belt and Road Initiative, China’s direct investment outflows will maintain strong growth momentum.
The acquisition by Chinese companies has been one of the main drivers for China’s steadily rising outbound direct investment. It has also led to some misunderstanding of China’s investment and buyout strategy.
Liu Yonghao, Chairman of New Hope Group Co., China’s largest private agricultural company, does not agree with the perception that China is buying up the world. “Such reports are over-exaggerated,” he said.
Liu believes that it is quite normal for China, as the world’s second largest economy, to participate in global investment. “We have been making great efforts to integrate ourselves into the global economy via cross-border investment and cooperation. In this way, Chinese entrepreneurs will be gradually involved in making international rules,” he said.
Bostjan Skalar, CEO of the World Association of Investment Promotion Agencies, based in Geneva, said cultural differences are everywhere and Chinese companies can deal with issues of cultural differences quite well.
Before entering emerging markets, such as Africa, he suggested Chinese companies better understand local laws and investment policies. Meanwhile, these markets will reap the benefits, when connected to the global value chain.
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