Belt & Road and the Global Reach of China Inc Go back »

2017-06-13 | Beijing

Belt & Road and the Global Reach of China Inc

On 7th June, Dr Anil Gupta, Michael Dingman Chair in Strategy and Globalization at The University of Maryland, joined President Emeritus Joerg Wuttke to discuss the expanding global role of China Inc and the influence of the Belt and Road Initiative (BRI) on Chinese outbound direct investment (ODI).

Gupta noted the comparative year-on-year surge in China’s ODI, but dismissed the notion that China is ‘buying up the world’ as hyperbole, noting that China’s ODI stock as a percentage of GDP remains significantly below the world’s other largest economies.

He also observed that while traditionally the majority of Chinese ODI has been into resources in developing economies, the recent increase in ODI to Europe and the United States has resonated more with media and commentators as China increasingly ‘learns to globalise’ and make more financially prudent investments. In the Q&A session Wuttke pointed to Chinese acquisitions of Volvo (by Geely) and Putzmeister (by Sany) as evidence that Chinese outbound investment, particularly by the private sector, has reached a new level of maturity.

Speakers also touched on some of the uncertainties surrounding the BRI, such as the impact of poor governance in many countries along the belt, and the sheer scale of capital outlay required to undertake such an ambitious project across so many potential investment destinations.

In the final question of the day an attendee asked, “Do you expect more countries to join the Belt and Road Initiative?” In response speakers noted the difficulty in defining exactly what it meant to ‘join’ the BRI, with Gupta raising the question, “if a Chinese company were to invest in an infrastructure project in Boston, would this by default mean the USA is part of Belt and Road? Most Americans wouldn’t think so.”