China will increase investment in emerging markets
Friday, May 24, 2024
Significance
Although its investments in Africa have attracted considerable attention, the vast majority of China's OFDI has gone to Asia, principally Hong Kong and a few financial centres including Singapore. A relatively small share of OFDI, to less-developed states, has yielded political benefits for Beijing.
Impacts
- China’s investments in developing countries where it accounts for a significant share of total inward FDI will affect economic stability.
- Chinese investment in manufacturing in developing countries will shape global supply chains and encourage investment in ancillary services.
- Stronger economic ties between China and developing countries will help spur their growth and enhance the China-centred economic network.
- The Belt and Road Initiative (BRI) will divert some investment into loans to developing countries, rendering OFDI data less significant.
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