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Guoyong Liang

The surge of Chinese outward direct investment has been one of the most important phenomena in the global investment arena since the early 2000s, especially after the outbreak of the global financial crisis. Driven by both proactive corporate strategy and strong government support, foreign direct investment outflows from China increased from less than US$3 billion in 2003 to nearly US$200 billion in 2016. In recent years, outflows have been driven by some critical emerging forces and demonstrated new structural characteristics. In particular, cross-border mergers and acquisitions have become an effective means to acquire “strategic assets,” such as famous brands and advanced technologies, in developed economies. This has helped Chinese companies move up the value chain and enhance their international competitiveness, and is also instrumental for the overall restructuring and upgrading of the Chinese economy. However, large-scale capital outflows have also generated risks and led to policy concerns. With the recent introduction of the Belt & Road Initiative, Chinese investment and financing in infrastructure industries and productive capacities in other developing countries will increase, helping enhance international connectivity, foster economic development, and inject a key impetus to globalization.