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Recent China-Hong Kong Inbound and Outbound Investments into Asia

Chinese outbound investments into Asia (including Australia) totaled 101 or roughly 40% of Q4 total volume of outbound investments and 48% of total Q4 global outbound. This percentage of volume has remained flat over the past few quarters, although China’s Asian outbound investments as a percentage of its global aggregate has increased, meaning more money has been allocated to Asia than elsewhere.

In Q4, China outbound investment into Asia was US$6 billion or 48.0% of the global outbound total while announced Asia inbound was US$10.1 billion, the highest since 2017. To recap as to why inbound surpassed outbound, President Xi Jinping fast forwarded the proposed 2020 inbound investment China law in 2018, then launched China’s dual circulation policy in Q4 2020. These two major policy changes led to Chinese inbound FDI (included in our data) rising by 20% in dollar terms in 2021 to US$181 billion after being stagnant at around US$135 billion for much of the previous decade.

The Q4 2021 figures have been heavily influenced by foreign investors preparing for the commencement of the Regional Comprehensive Economic Partnership (RCEP) free trade agreement, which came into effect on January 1, 2022, just over six weeks ago. We expect these investment trends to continue to tap into opportunities this new trade bloc provides – covering 30% of global GDP and 30% of the global consumer market.

China in fact led the way with over 100 outbound investments into Asia/Australia: 46 into Hong Kong, 25 into Southeast Asia (Singapore, Indonesia, Vietnam, and Thailand), 17 into East Asia (Taiwan, Japan, and South Korea), 6 into South Asia (India and Pakistan), and 7 into Australia.

On the larger scale, these investments included the completion of the China-Laos Railway, which opened in December, as well as the Phase 3 development of Thailand’s Laem Chabang Deepwater Port, Sri Lanka’s Colombo East Container Terminal, and Indonesia’s Java High-Speed Rail among others.

Source: China Briefing


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