China’s Outward Investment Explodes, and Peaks?

Chinese investment around the world set a record pace in the first half of 2016, exceeding its full-year total from just four years ago. The upsurge is largely due to investment in the United States, mostly from acquisitions by private Chinese firms. By sector, China continues to diversify. Energy remains most important in construction, but has been eclipsed thus far this year by investment in technology and entertainment.

The investment boom can’t last. China’s financial resources are still massive but dwindling. Lack of reciprocal access to the Chinese market will begin to alienate recipient countries. With Chinese companies now a notable presence in the US, American policy should emphasize the rule of law. Companies that break American law should be barred; those that follow the law welcomed.

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