Back in late 2014, China projected that its off-shore direct investments will reach $1.2 trillion, Financial Times reported. Today, China’s outbound direct investments has been projected to reach $1 trillion by the end of the 2015.
This is real positive action at work instead of microphone diplomacy and doublespeak.
The staggering financial muscle of China has enabled the once reclusive nation to start dictating global policy decisions, forcing the Council for Foreign Relations to reformulate its policy towards the Asian nation.
“The United States needs to fundamentally change its grand strategy toward China.
One need look no further than the recent Asian Infrastructure Investment Bank (AIIB) debacle to understand how China’s ascent is aimed at challenging American global reach. The China-led international financial institution is poised to undermine the influence of the U.S.-led World Bank and International Monetary Fund while institutionalizing China’s geoeconomic coercion in the Asia-Pacific. Italy, France, Britain, Germany, South Korea, Denmark, and Australia have signed on as members of the AIIB, with Thailand and even Taiwan eyeing imminent entry. Meanwhile, the U.S. remains on the outside looking in as its influence is directly challenged by China’s rise.
Along with the AIIB, China is also pursuing a number of additional initiatives to expand its strategic reach in Asia and beyond. China has announced plans to advance a Free Trade Area of the Asia Pacific (FTAAP) and Regional Comprehensive Economic Partnership (RCEP)—trade agreements that link the economies of China, Japan, and India along with Southeast Asian countries.
Beijing is simultaneously promoting the creation of a New Silk Road, which would open trade routes through Central Asia and maritime routes around Southeast and South Asia, better connecting China geopolitically to growing Asian economies and, through them, to the Middle East and Europe. Add to these projects the ongoing discussions over the creation of a new BRICS Development Bank between Brazil, Russia, India, China and South Africa.”
China’s total offshore investment on track to exceed US$1 trillion by end of 2015
Reuters in Beijing
China’s outbound direct investment (ODI) is expected to exceed US$1 trillion for the first time in 2015 as slowing economic growth and rising internationalisation of Chinese business leads to more local companies investing abroad.
Total direct investment offshore rose to just under US$883 billion in 2014, Zhang Xiangchen, the Ministry of Commerce’s deputy China international trade representative, said on Thursday.
The ministry reported on Wednesday that non-financial ODI rose 18.2 per cent to 473.4 billion yuan (US$77 billion) for the first eight months of the year.
On Thursday it also revised up its 2014 offshore non-financial direct investment tally to US$107.2 billion from the US$102.9 billion reported previously, taking total outward investment for the year to $123.12 billion.
“Our outbound investment has maintained a double-digit growth rate, and this trend will be sustained in future,” Zhang told a media briefing.
China’s slowing economy and market volatility was driving domestic firms to acquire foreign brands and technology, as well as diversifying, said, research director at the US analysts, Rhodium Group.
Beijing has rolled out policies to support the global efforts of Chinese companies, offering financial incentives and removing administrative controls on offshore deals.
Chinese companies have already announced or completed 390 deals worth US$77 billion in the year to the end of September 2016, according to Thomson Reuters data – a doubling of the total amount of money involved in deals over the same period last year.
So far this year Chinese firms have already spent more on global mergers and acquisitions than the US$70.4 billion spent over the whole of 2008 – formerly the biggest year to date for offshore mergers.
Industrial deals were the biggest transactions, led by China National Chemical Corp’s buyout of the Italian tyre maker, Pirelli, for US$8.88 billion, which included Pirelli’s debt.
Many of this year’s big deals were done by Chinese firms buying financial services businesses, including HNA Group’s subsidiary, Bohai Leasing Co, which paid US$2.56 billion for the aviation leasing firm, Avolon Holdings.
Zhang said by the end of 2014, 18,500 Chinese domestic investors had established nearly 30,000 enterprises abroad, with about 77 per cent showing profits in 2014.
“State-owned firms and private companies are looking to buy overseas financial institutions that are yielding strong cash-flow and providing an international presence and market share,” Eugene Qian, head of China business at UBS.
Soft Power: Xi Jinping Lays Out Silk Road to Africa With Money
19:02 07.12.2015(updated 20:32 07.12.2015)
During a summit of ‘China-Africa’ cooperation with the participation of heads of state and governments from 48 African countries, Xi Jinping announced that $60 billion will be invested in transcontinental projects across Africa.
It is the largest aid package ever given to Africa by China. During the visit, Xi Jinping signed agreements and specified more than 60 joint projects and programs. They cover the industrialization and modernization of agriculture, infrastructure construction, improvement of financial services and debt restructuring, trade facilitation and investment, environmental protection, poverty alleviation, health care and humanitarian exchanges.
China is making a large economic investment in the state railway operator in South Africa. The largest contract — $2.5 billion was just signed recently.
And as always, we can count that what China and Russia have planned to achieve will materialize in the soonest possible time…
Gazprom, China’s CNPC Confirm Plan to Sign Agreement on Power of Siberia
09:21 08.12.2015(updated 10:53 08.12.2015)
MOSCOW (Sputnik) – Earlier on Tuesday, the Gazprom delegation headed by the company’s CEO Alexey Miller held a meeting in China with his partners from China’s CNPC.
“During the meeting, the continuing work on delivering gas to China along the eastern route was discussed. The sides confirmed their intention to sign an agreement soon on the planning and construction of the transborder section of the Power of Siberia gas pipeline, including the submerged crossing of the Amur River,” the statement reads.
Energy remains the main sphere of the China-Russia bilateral cooperation. In May 2014, Moscow and Beijing signed a historic 30-year gas contract worth $400 billion to transfer 38 billion cubic meters of gas annually from Russia to China through the Power of Siberia gas transmission system.
This brings us now to the differences between Obama and Xi as exemplified in their visits to Africa. Here’s what they said…
President Xi: “What has made China-Africa friendship durable and vigorous is that our two sides have always been guided by the principle of treating each other as equals… China and Africa will forever remain good friends, good partners and good brothers.”
President Obama: “As president, I’ve worked to transform America’s relationship with Africa – so that we’re truly listening to our African friends and working together, as equal partners.”
Both presidents used the word “partners” but there is still a difference. Africa analyst Aubrey Hruby says that China is able to emphasise the shared development experience with Africa, whereas the US has had to work harder at making the equal partnership a reality.
Aside from the growing Chinese investments abroad, the recent IMF approval of the Renminbi [Yuan] into its SDR basket further boosts not just China’s economic and geopolitical clout but would also sink the US dollar dominance with the planned backing up of the local currency with hard assets, e.g. gold.
It’s been reported also that most of Asian banks are now cleansed from toxic fiat currencies, as the United States is also being prodded to start printing treasury notes to shut down the Khazarian Mafia’s stranglehold on the Land of the Free. Herein lies the problem.
The current Obama administration is not hell bent on improving the lot of the Americans as recent and past actions are to be considered. The continued diversion from pressing economic issues in favor of gun control only feeds the notion that Obama’s mindset is somewhere else, leading to the theory that he was paid off to call off anti-Hillary efforts post congressional hearings. The Benghazi hearings was also turned into a charade with the leading actors having 17 months, or so, to familiarize the whole script.