Top stock newsletters 20168/29/2023 As Chinese investment in the European energy sector dropped in 2012, it surged in both Canada (from $4.4 billion in 2011 to $20.79 billion in 2012) and the US (from $200 million in 2011 to $3.38 billion in 2012). In North America, some Chinese firms took an interest in innovative techniques for extracting oil and natural gas, which they hoped to apply to China’s largely untapped shale gas reserves. Roughly one-fifth ($130.4 billion) of total Chinese investment into North America and Europe from 2005-2019 was in the energy sector. In the early 2010s, China’s investments in North America and Europe were largely driven by a demand for energy security. As the impacts of Covid-19 continue to weigh on the global economy, Chinese investment into North America and Europe – and the rest of the world – is expected to continuing falling. The steep drop-off in Chinese investment in the US has contributed to a significant decline in Chinese FDI outflows globally in recent years. The drop was partly a result of tense US-China trade relations, which led to increased scrutiny of Chinese FDI and uncertain economic outlooks in the two countries. After reaching a high of $53 billion in 2016, Chinese FDI into the US fell 94 percent to an eight-year low of just $3.2 billion in 2019. The greatest declines occurred in the US. In 2019, Chinese FDI into North America and Europe stood at just $32.8 billion – the lowest point since 2013. With an intake of $83 billion, the UK was the top recipient of Chinese FDI in Europe, the second-largest recipient within North America and Europe, and the third-largest recipient globally.Ĭhinese investments into North America and Europe took an abrupt shift in recent years, growing steadily from $2.1 billion in 2005 to a peak of $119.1 billion in 2017, before falling sharply in the years since then. About three-quarters of this went to countries in Western Europe ($162.1 billion) and Northern Europe ($127.3 billion), which tend to be wealthier than their counterparts in Eastern and Southern Europe. Top Destinations for Chinese FDI in North America and Europe (2005 – 2019)ĪEI and Heritage Foundation, China Global Investment TrackerĬhinese FDI flows into Europe totaled $383.4 billion during the 2005-2019 period. By comparison, the top three investors in the US – Japan, the UK, and Canada – accounted for 13.9 percent, 11.3 percent, and 11.1 percent of inflows respectively. The US Bureau of Economic Analysis estimates that in 2019 China accounted for only 0.8 percent of US investment inflows. However, China is far from the US’ largest investor. The United States is the top destination in the world for Chinese FDI, drawing in $183.2 billion, or 15 percent of China’s total outflows, between 20. From 2005 to 2019, Chinese companies invested $624.4 billion in North America and Europe, amounting to just over half (50.9 percent) of all Chinese FDI outflows during this period. North America and Europe are also the top destinations for Chinese FDI. As of 2019, just over 65 percent of global FDI stocks were concentrated there. North America and Europe, excluding Mexico, are collectively the top destination for global FDI. In contrast, high-income countries – which are mainly clustered in North America and Europe – attracted 62.1 percent of Chinese FDI outflows, which totaled $1.23 trillion. From 2005 to 2019, low and middle-income economies received 83.4 percent of the $815.3 billion worth of Chinese construction projects across the globe. Unlike FDI, which mostly goes to more developed economies, construction contracts are concentrated in developing parts of the world. The CGIT breaks down China’s overseas economic activity into foreign direct investment (FDI) and construction contracts. Calculations in the subsequent sections are primarily derived from data provided by the American Enterprise Institute and the Heritage Foundation’s China Global Investment Tracker (CGIT), which monitors China’s global investments and construction activities valued at $100 million or more.
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