Columbia International Affairs Online: Working Papers

CIAO DATE: 09/2014

Chinese global investment growth pauses

Derek M. Scissors

July 2014

American Enterprise Institute for Public Policy Research

Abstract

Key Points

 Chinese foreign investment declined through mid-2014 for the first time since the financial crisis.

 By sector, energy draws the most investment, but a slump in energy spending means that metals and real estate have been more prominent so far in 2014.

 The United States has received the most Chinese investment since 2005, followed by Australia, Canada, and Brazil. China invests first in large, resource-rich nations but has also diversified by spending more than $200 billion elsewhere.

 Chinese investment benefits both China and the recipient nation, but host countries must consider thorny issues like Chinese cyberespionage and subsidies.