According to a recent report published by the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment (FDI) rebounded in 2015, hitting its highest level since 2008.
When it comes to FDI net inflows, the United States remained the world’s No. 1 hotspot for global investors in 2015.
Hong Kong, meanwhile, has not only remained a paradise for European and American investors, but has also become an important safe haven for mainland tycoons and officials who seek to move their money offshore.
Coincidentally, Hong Kong companies, along with Taiwanese businesses, were also China’s biggest foreign investors in 2015.
Mikhail Gorbachev, president of the former Soviet Union, once said the continued support of overseas Chinese business tycoons had proven instrumental in the success of China’s economic reforms.
He said his perestroika would probably have worked too if only there was an overseas Russian community that was equally affluent and influential as the Chinese back in the ’80s.
It suddenly got me thinking: Would the People’s Republic of China also have disintegrated like the Soviet Union did had it not been for the steadfast support of overseas Chinese tycoons?
As far as FDI net outflows are concerned, the US and Japan remained the biggest foreign investors in the world in 2015.
The UNCTAD report also indicates that many governments in the Third World have become increasingly mindful of foreign investment in strategic sectors on their soil such as utilities, health care, education, public transport and telecoms out of national security concerns.
And that can perhaps explain why Chinese companies have continued to run into snags trying to acquire mines, ports, and land across Southeast Asia, Africa and South America in recent years, given that Beijing has been portrayed by western media as “neo-colonialist” which is aggressively exploiting raw materials in poor countries in order to fuel its own economic growth.
However, despite the impressive figures of inward and outward FDI in 2015, the UNCTAD has expected that the amount of global FDI flows of 2016, which will be published in June this year, is likely to be down 10 to 15 percent compared with 2015, mainly due to the increasingly tense international political climate.
As such, it is expected that Chinese companies may encounter even more difficulties in acquiring assets and natural resources in Third World countries in the days ahead.
This article appeared in the Hong Kong Economic Journal on April 28
Translation by Alan Lee
[Chinese version 中文版]
– Contact us at [email protected]