July 9, 2012
Chinese Outward Investment: Acceleration Features the U.S.

by Derek Scissors

Chinese investment could be a global economic force for decades to come. The potential was underlined in the first half of 2012, when investment climbed more strongly than in 2011.

The U.S. in particular saw a rebound. Policymakers should welcome this development by making the American review process quicker and more transparent. Washington should also seek better American investment access on a bilateral and multilateral basis, including in China.

The China Global Investment Tracker

The Heritage Foundation offers the only public dataset of Chinese outward investment and dates back to 2005.[1] The China Global Investment Tracker includes well over 300 investments of $100 million or more from the beginning of 2005 through June 30, 2012. In addition to transactions valued at less than $100 million, the dataset does not include bond purchases, trade, loans, or aid.

Official Chinese government figures for outbound investment have a number of serious flaws-for example, treating Hong Kong as the final destination for almost two-thirds of outward investment, when it is almost entirely a transshipment point. The Heritage dataset provides far more useful information about the geographic and sector distribution of Chinese investment.

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