Understanding China’s Efforts to Invest Overseas

Understanding China’s Efforts to Invest Overseas

from The Diplomat by Eve Cary

The old axiom, “there’s no such thing as bad publicity,” has not been the case for China’s efforts to invest overseas, which have been plagued by negative attention. Highly-publicized investment failures such as the China National Offshore Oil Corporation’s blocked 2005 bid for UNOCAL and the collapse of a $1.7 billion Chinese housing investment project in San Francisco earlier this month have set the narrative, but do not tell the whole story. Public understanding of China’s outward foreign direct investment (OFDI), particularly in the United States, is not based on facts.
The growth of investment in the last 10 years has been astronomical, largely because the starting figure is so low: OFDI totaled just $2.5 billion in 2002.  In comparison, official numbers, according to the Economist,  put total ODI at over $77 billion in 2012, an increase of 12.6% from 2011 and enough to make China the sixth-largest global investor.
This figure is still rather small, however.  Context is important here: Belgium, the Netherlands, and Spain have larger holdings than China, according to the Economist.  Additionally, though investment in the United States has grown substantially (39 percent year-on-year from 2010 to 2011, for example) the $50 billion invested from 2005-2012 comprises just 1.8 percent of the U.S.’ total inward investment for that period, according to a 2012 report by the Heritage Foundation.http://thediplomat.com/china-power/understanding-chinas-efforts-to-invest-overseas/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+the-diplomat+%28The+Diplomat+RSS%29&utm_content=Google+Reader