China Services Group

Analysis

China Inc. Goes Global

China’s overseas investment has been on the increase, mostly supported by government strategy and its sovereign wealth funds. Last year marked a major shift in China’s investment position, as overseas direct investment exceeded inbound foreign direct investment for the first time.

China’s overseas investment has been on the increase, mostly supported by government strategy and its sovereign wealth funds. Last year marked a major shift in China’s investment position, as overseas direct investment exceeded inbound foreign direct investment for the first time. Dr Martyn Davies explores why Chinese outbound movement of foreign capital has evolved into a sophisticated strategy to acquire leading global companies.


There are now 95 Chinese firms on the Global Fortune 500 list of the world’s largest companies (the US has 128). In 2014 they jointly posted US$5.8 trillion in revenues.1 A large number of these companies are emerging as multinationals as they take their businesses global. I have been very fortunate in my career to observe, and later participate in, the outbound movement of Chinese capital in search of investments and acquisitions that began around the turn of the current century. What began as a very state-heavy and, at times, clumsy attempt by a handful of stateowned enterprises (SOEs) that had previously little or no international experience to invest abroad, has evolved into a far more sophisticated strategy to acquire leading global companies in the global marketplace.

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