Back in October, the Financial Times wrote that the outbound investment from China will soon surpass the amount invested in the hinterland, which marks a new step in the emergence of this new economic power.
"This is just a matter of time, if not this year then happens is going to happen in the very near future," Zhang Xiangchen, Chinese Assistant Minister of Commerce, told the newspaper.
Not only China is about to become a net exporter of capital, which has already surpassed their Western counterparts as the main source of credit for the developing world. And from this financial prominence likely want to exert political influence, too.
In other words, China's overseas investment is coming soon to a country near you! And it will change the world. Here is a summary of China's progress so far:
China's investments abroad are enormous, amounting to $ US870 million late last year, according to data published by the Heritage Foundation, a US research institute.
This map, also from the Heritage Foundation, shows the current scope of Chinese investment. The higher the cake bigger investment.
The United States is leading, after receiving a little more than $ US72 million since 2007. Of these, the most recent and largest proportion is in capital investment, which shows that Chinese investors will after stocks as well as commodities and real estate.
Metal Sector rich Australia has also received attention during the year, totaling more than $ 30 billion that Chinese companies invested in mining companies and projects Down Under.
The latest wave of investment has also come to Britain and its real estate and real estate.
It is "[...] further outflow of capital of China, particularly favored as Australia, the US and UK markets will accelerate" Alistair Meadows, director of international capital in Asia-Pacific to JLL, real estate investment consulting, told the Financial Times.
Almost half of investments worldwide, about $ US395 million, are in the energy sector.
This makes sense, since China is increasingly seeking foreign sources of energy to maintain its growth rate. In 2013, China imported almost 60% of its oil and 30% of its gas, said Foreign Affairs.
When China invests in a country, it quickly becomes the largest creditor, sometimes to the point of altering the economic scenario and diplomat.
Here are three examples.
China in Africa:
China first began investing in Angola in 2004, when a Chinese road investment program agreed in exchange for a portion of the vast oil reserves in Angola.
Five years later, China became the largest trading partner not only in Angola, but to the whole of Africa. Last year, China pledged an investment of US $ 20 billion in infrastructure in Africa alone. But there is much more than roads and bridges: Chinese investments in Africa are in the billions to tens-of-dollars and cover everything from real estate to financial services minerals.
Countries such as Chad and Niger now owed to China about 15 times what they receive from the International Monetary Fund (see table below).
Even in Sierra Leone, which received a new wave of IMF funds to combat Ebola, China is ahead by far.
This table compares current open loans from the IMF in its development projects in Africa, with Chinese direct investment between 2008 and 2014:
Chinese investment is primarily aimed at obtaining raw materials to feed China's manufacturing sector, with almost no local processing other than sending them from the mine to the port.
Africans are already complaining downside of this practice: "We lose all opportunities for job creation, since all jobs are still made by the Chinese in China," Joseph Onjala, senior researcher at the Institute of Studies Development of the University of Nairobi, told Al Jazeera.
China in Latin America:
China is a major lender to Venezuela and Argentina, the two most affected countries in the region.
Both Nicolás Maduro, president of Venezuela, and Cristina Fernández de Kirchner, his Argentine counterpart, have been long neglected by Western creditors. Both ended up knocking on the door of the Chinese in search of cash.
According Bianca Fernet bubble, China is taking great - possibly unpopular - risks, with greatly to the Latin American couple:
When China enters in countries like Venezuela, Argentina or Russia during a crisis situation, you can paint like superhero hawk, saving the day. But the reality is that dive in resource-rich countries, where no one else dares to tread and hard thrusts terms by the throats of the desperate leaders' is at least as predatory as did the famous vultures Argentina, or possibly more.
China in Asia:
China is a strong investor in Pakistan and Bangladesh, in both cases exceeding these countries receive loans from the IMF and other Western partners.
Chinese investments in the Middle East have funneled $ US55 billion to the region between 2007 and 2014, according to data from the Heritage Foundation.
Again, it is primarily aimed at energy projects but growing real estate UAE is also becoming a new target. In May 2012, only China National Chemical Engineering Group invested nearly US $ 3 billion on the banks of the UAE. And rich Chinese division / real estate market in Dubai and Abu Dhabi now totals more than $ US5.5 billion. Last year CNBC Wealth Within Dubai declared the best in the world for returns of real estate.
Indonesia has received $ US8 million of its mineral resources on it in transport deals, and $ US13 billion in the energy sector.
Even Japan and India, two of China's rivals for dominance in Asia, have been the target of a spending spree of $ US1.6 billion and $ US12 billion, mainly before 2013, when political tensions in the region began to raise some eyebrows. That year territorial disputes over the Senkaku Islands, a rocky archipelago in the East China Sea, made the trade between China and Japan fell by 4%, the first time in three years.
The reduction in China-Japan business was bilateral. Jonathan Holslag, a researcher at the Brussels Institute of Contemporary China Studies, told The Financialist that:
"The growing dependence on Japan to China [...] is not a very desirable development so there are a lot of thinking going on to try to diversify beyond China, to conclude business partnerships with the countries of South Asia and India and some places so the Middle East and Africa "East.
China even has its own World Bank
Later this year two international institutions, the New Development Bank and the Asian Infrastructure Investment, will soon begin to operate as an alternative to the World Bank, backed by the West. Both are pet projects of China.
The first was launched in July 2014 with the other countries that make up the BRICS (Brazil, Russia, India, China and South Africa). Headquartered in Shanghai, its mission statement is to "strengthen cooperation between our countries [BRICS]" counterweight to Western-dominated IMF and the World Bank.
The second institution is open to 21 countries in Asia and the Pacific. But heavyweights like Australia and South Korea were not presented in Beijing at the official launch in October 201.4 allegedly after pressure from the US .. (Indonesia was also absent at first, but later decided to join in. )
Commenting on the initiative, The Economist wrote that:
China will use the new bank to expand its influence at the expense of America and Japan, the establishment of Asia. China's decision to fund a new multilateral bank instead of giving more to existing reflects his exasperation with the glacial pace of reform of global economic governance.
China has lost patience trying to change Western institutions from within and "are taking matters into their own hands," wrote economist. The fact is that China has now overtaken the West as the kingpin of investment in the developing world in economic terms.
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