Record Chinese Outward Investment in 2016: Don’t Overreact
China’s investment around the world grew almost 50 percent in 2016 to approximately $175 billion. It has now doubled in size since 2012.
China’s global spending surge is due primarily to investment in the United States, which exceeded $50 billion in 2016. Acquisitions by private enterprises are at its heart.
Energy made a surprise comeback in 2016, leading all sectors in drawing Chinese funds. However, a bigger story was a jump in attempted and successful technology acquisitions.
This year will be weaker than last. Total investment may or may not fall, but diversification by country, sector, and the Chinese companies is likely to decline.
American policy should be based on actions by China and Chinese investors, reciprocity and obeying US law, respectively, rather than nominal state ownership.