- China’s expanding investment in other countries has met with increasing suspicion and scrutiny.
$117 billion: How much China invested abroad in 2019.
China has become a significant investor in the world over the past two decades, mainly through buying and building business operations overseas.
Last year, China was the world’s fourth-largest overseas investor, accounting for 8.9% of the money invested in foreign nations. Japan, the United States and the Netherlands were the world’s top three foreign investors in 2019.
China’s 2019 investment represents a 17-fold increase from the $6.9 billion that China invested abroad in 2001 when it joined the World Trade Organization, according to data from the United Nations.
The explosion in China’s global investment speaks to the success the country has had integrating itself into the global economy over the past 20 years, but geopolitical tensions and tighter financial restrictions have resulted in a slowdown of money leaving China since 2016.
2019 was the third consecutive year that China’s overseas investment has declined after peaking in 2016 at $196 billion.
These investments are driven both by private companies and state-owned enterprises China. In 2018, private companies accounted for 62% of the $143 billion total investment, while public entities accounted for 38%.
The majority of Chinese investment heads to other Asian countries, accounting for 73% of the total in 2018. The second-largest market is Latin America at 10%, followed by North America at 6%, Europe at 4.6% and Africa at 3.8%.
Hong Kong, a special administrative region of China, is technically the biggest recipient of Chinese investments. In 2018, more than 60% of the total went through the region.
But a good portion of Chinese investment in Hong Kong does not stay.