Recent years, China has successfully changed from capital importing country into capital exporting country. With the enhancement of comprehensive strength, China has continued to develop overseas market tirelessly. Since 2003, investment abroad has continually grown for 13 years.
The average growth annual rate is over 30%. At the end of 2014, the stock of FDI was 0.88264 trillion dollars which is in the top 10 of the world. Up to 2014, around 18500 Chinese investment companies have invested almost 30000 foreign direct investment enterprises.
The most notable market is the American market. In 2014, Chinese companies have purchased over 100 companies in America, and in 2015, up to 142. Based on the consideration of various factors, American government has started to strengthen the control of Chinese investment. In January of this year, Committee on Foreign Investment in the U.S. (CFIUS) rejected the plan which Philips decides to sell its lighting business to Chinese company, and in February Tsinghua Unigroup has cancelled the deal of investing Western Digital which has been received the notice of inquiry from CFIUS before. American government keeps under strict control especially high-tech industry compared to traditional manufacturing industry.
According to the data analysis, the rate of Chinese non state-owned enterprises investing in America increases. Chinese enterprises invest mostly in service industry. This year, for different reasons among them the government control, the speed of Chinese enterprises investing in America slows down.
But the American market isn’t the only destination of Chinese investors. Because of the weakness of the European market, Chinese investors are much more welcomed in Europe. In 2015, Chinese investors has invested in Europe over USD 23 billion which is much more than the amount of investments in American market.
Compared to investing in the American market, the proportion of state-owned enterprise investments in the European market is larger and the main investment industries are infrastructure construction and transportation. Italy, France, the United Kingdom and Germany get the most investments as the four major European economies.
Last year, ChemChina invested EUR 7.1 billion to acquire Pirelli. Lenovo purchased Germany Medion AG. This year, Sino-Europe Sports has purchased Italy AC Milan Club spending EUR 0.72 billion. The acquisition of which China Midea Group purchases Germany KUKA Aktiengesellschaft is ongoing recently. Desaiye, a famous French lace maker has been bought by HangzhouYongsheng Group.
With global competition and China’s capital accumulation, besides, the Belt and Road plan increasing the confidence to invest abroad, Chinese investing abroad is irresistible.
One more thing you need to know is that overseas investment is supervised by Chinese government which means if you intend to invest abroad you shall get approval of Ministry of Commerce where your investment industry involves sensitive countries, regions or sensitive industry, such as country with conflict, basic telecommunication trade, news media, cross-border water resources development and utilization, or shall put on record if it is not foresaid situations. Chinese government encourages overseas investment in recent years, such a golden opportunity shall not be missed.
To better understand how to invest in a European or an American business, ask for more details. Send an email to firstname.lastname@example.org