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Chinese Investment in Developed Markets
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Chinese Investment in Developed Markets

An Opportunity for Both Sides?

The Economist Intelligence Unit
EIU, 2015
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Editorial Rating

8

Qualities

  • Comprehensive
  • Innovative

Recommendation

A number of conspicuous acquisitions, including the Waldorf Astoria Hotel in New York and auto manufacturer Volvo, give the impression that the Chinese are soaking up companies in the West at a rabid pace. But the reality is more nuanced, as this discerning report from the Economist Intelligence Unit reveals. While China’s overseas direct investment is likely to grow, its businesses face significant hurdles in their forays into developed markets. getAbstract recommends this smart study to investment bankers, corporate executives and investors.

Take-Aways

  • China’s overseas direct investment (ODI) was minimal until 2004. In 2014, estimates predicted that that year’s ODI would top $120 billion.
  • However, Chinese ODI portfolios are only about one-tenth the size of those of US companies, and China’s ODI totaled only 5% of GDP at the end of 2012, compared to the global average of 33%.
  • While China’s state-owned enterprises lead in foreign investments, their share is falling, as the government eases regulations so more private-sector firms can invest abroad.

About the Author

The Economist Intelligence Unit is an independent research and analysis organization.

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