US will feel impact of shifts in Chinese investment

By Hu Weijia Source:Global Times Published: 2019/1/31 0:29:13

A study released by China's Ministry of Commerce on Tuesday reminded Chinese companies of increased risks of investing in North America, especially the US and Canada.

As Washington grows more hostile toward Chinese investment through an increase in security reviews, Chinese companies' willingness to go to the US has been decreasing. In 2017, China's investment in North America was down 68.1 percent from the previous year, Chinese official figures have shown. 

Washington's policy has had a negative effect on China's investment in the US, but it cannot dampen China's overall investment enthusiasm. Chinese companies have become more mature in recent years, and many of them are looking to internationalize their businesses. If the US and Canada seek to close their doors, then Chinese investors will find opportunities elsewhere.

China is witnessing an unprecedented boom in outbound investment. In 2018, China's outbound direct investment was $129.8 billion - equal to about 8 percent of Canada's GDP in 2017. The figure is still on the upswing. These capital flows are driving economic growth and job creation, and they're also a strong power that can reshape the global industrial chain.

The US was once a key destination for China's outbound investment, but now Washington's policies have prompted Chinese companies to look for alternative investment opportunities worldwide. 

This trend is of profound significance to the region and the world. There has been much discussion about the impact of Washington's tariffs on the global economy, but less attention has been paid to investment restrictions, which will probably have a more profound impact on the global industrial chain.

Let's take the example of Huawei. Amid difficulties involving the arrest of Huawei CFO Meng Wanzhou, the Chinese telecoms company is likely to adjust its global strategy and shift its focus from the US to other markets.

The company is now one of the world's leaders in developing 5G network technology. As it moves away from the US and forges closer commercial ties with other countries, the world will feel the impact brought about by changes in the industrial chain as well as investment growth, technology development and job creation.

China has a group of enterprises like Huawei that have great international influence. Their outbound investment will reshape the global industrial chain, and one day, this transformation will have an impact on the US economy.

The author is a reporter with the Global Times.


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