Main article: Economy of China
2024: Investment growth of 12% to 789 billion yuan in 8 months
China's investment in other countries rose 12.5% in yuan to 789.45 billion ($112.5 billion) in the first eight months of 2024 compared with the same period a year earlier.
2023
China's foreign direct investment growth of 16.7%
At the end of 2023, the total volume of China's direct non-financial investments abroad amounted to 916.99 billion yuan. This is 16.7% more compared to the previous year, as reported by the Ministry of Commerce of the People's Republic of China on January 26, 2024.
It is said that in dollar terms, China's direct non-financial investments in 2023 reached $130.13 billion. Compared to 2022, growth was recorded at 11.4%. The total amount of cash investments in countries located along the Belt and Road amounted to 224.09 billion yuan (approximately $31.2 billion at the exchange rate as of February 14, 2024). Growth in relation to 2022 - 28.44%.
The turnover of contracted projects abroad increased by 8.8% on an annualized basis, reaching 1.13 trillion yuan ($157.33 billion) in 2023. The total value of the newly signed contracts increased by 9.5% to 1.86 trillion yuan ($258.97 billion).
China's total direct external investment reached $147.9 billion in 2023, an increase of 0.9% compared to the previous year. Chinese companies reported an increase in the value of foreign M&A transactions by 20.3% on an annualized basis - to $39.8 billion. Despite the fact that the number of transactions decreased by 16.3% year-on-year (to 457 agreements), the share of large M&A contracts, the value of which exceeds $500 million, has noticeably increased. And in the direction of "Belt and Road" the activity of mergers and acquisitions jumped in annual terms by 32.4%, amounting to approximately $17.3 billion in monetary terms.
It is also noted that the total value of the signed Chinese foreign contracts for design, procurement and construction amounted to $264.5 billion in 2023, which was a five-year maximum. Growth compared to the previous year was recorded at 4.5%.[1]
For the first time in China's history, the private equity balance has turned negative - investing in more outside than they get
Chinese investment in the outside world is increasing. In 2010-2016, there were $27.1 billion per quarter, in 2017-2019 they grew to 34.9 billion, over the past three years - 41 billion, and over the past year - 43.5 billion, Spydell Finance wrote in October 2023.
Portfolio investments are less common. Since 2005, non-residents have invested "only" $1.2 trillion, and since 2022, net outflow over $100 billion.
The Chinese investment paradigm has changed since 2015 (from 2009 to 2014, the Chinese practically did not invest in the outside world in portfolio investments). Over 8.5 years (from 2015 to 2q23), net purchases of foreign assets by the Chinese amounted to over $900 billion and are now accelerating to 120-130 billion per year.
China practically does not borrow loans - over 20 years, the accumulated growth of debt is less than $1 trillion, where loans are less than 0.2 trillion and about 0.4 trillion in monetary instruments.
However, China itself actively credits and promotes the yuan - over 20 years, the accumulated increase in other investments exceeded $2.6 trillion, where loans and trade advances of 0.7 trillion, the money market - 1.1 trillion.
Western countries are rapidly losing investment from China due to their hostility
Chinese money is fleeing the Western world: just a few years ago, Chinese money excited the entire rich world. Chinese investors have been making high-profile deals and buying up trophy assets - from luxury homes and five-star hotels in New York to a Swiss chemical company and a German robotics giant. By mid-2023, this era was over.
Chinese investment is moving away from the West as hostility to Chinese capital grows. Instead, Chinese companies are increasingly spending money on factories in Southeast Asia, mining and energy projects in Asia, the Middle East and South America as Beijing seeks to strengthen its alliances in those countries and secure access to critical resources.
Afghanistan Oil and Gas Contract
In early January 2023, Taliban spokesman Zabiullah Mujahed announced a contract with the Chinese company CAPEIC (Xinjiang Central Asia Petroleum and Gas Co) for the development of an oil and gas field in Afghanistan.
According to the agreement, the Chinese will receive the primary right to extract oil and gas from deposits in the Amu Darya river basin in the provinces of Sari-Pul, Jauzjan and Faryab. For this, the Taliban will be paid about 150 million US dollars a year, and in three years the amount will increase to 540 million.
Despite the emerging security problems, the Chinese side is actively increasing its presence in troubled Afghanistan. At the same time, investment in the oil and gas sector is due to the need to provide assistance to the Taliban in return for the priority right to extract lithium and other rare metals.
2022
China has cut loans to other countries for the first time in 20 years
In 2022, China issued loans to other countries for $182.8 billion, which is 3% less than a year earlier. The figure fell for the first time in 20 years. Such data were released in early January 2024.
According to RIA Novosti, citing materials from the World Bank, in 2022 the PRC reduced lending to 69 countries. The largest debt to China decreased in El Salvador (by 40%, to $300 thousand), Eritrea (by 33%, to $12.8 million) and the Dominican Republic (by 22.2%, to $707 thousand).
Turkmenistan reduced its debt by 22%, and at the end of 2023 it amounted to $119.5 million, and Niger reduced its debt by 21.9% to $225.4 million. Loans also declined significantly for Vietnam and Turkey (by 21%), Brazil (by 20%) and Mauritius and Myanmar (by 19%).
The debt of the largest Chinese debtors at the end of 2023 also decreased. For example, Pakistan reduced its debt by 7% to $26.6 billion, and Angola - by 5% to $21 billion. Sri Lanka's debt decreased by 4% to $8.8 billion, and for Ethiopia - by 8% to $6.8 billion. Kenyan debt also decreased by 9% to $6.7 billion.
Meanwhile, 25 countries have increased debt in relation to China, especially Guyana - 2.2 times to $520.3 million. Loans to Madagascar increased 1.7 times to $314.3 million, and for Serbia - by 30% to $2.3 billion. Nigeria's debt to China rose 18% to $4.3 billion, and Bangladesh increased its debt by 15% to $6.1 billion.
Iran (with a debt of $6.1 million) and Albania (with a debt of $1.9 million) are the only two countries with a debt for 2022 remained unchanged.[2]
China, issuing new loans to pay off past debts, binds the economies of these countries to itself, commenting on the analyst "Opening Investments" Andrei Kochetkov. China, investing in infrastructure projects abroad, attracts its construction companies and suppliers, that is, it invests in its economy in this way, he said.
China is the largest lender to emerging economies: $240 billion in 3 years
China has become the world's largest lender to emerging economies. As of March 2023, since 2020, China has allocated at least $240 billion for these purposes.
For 22 years, China issued loans to 49 African countries for $170 billion and stopped financing
According to the database "Chinese loans to African countries," which has been maintained by the Center for Global Development Policy at Boston University since 2007. In 2000-2022. 39 Chinese organizations issued 1,243 loans worth $170.08 billion to 49 African countries and 7 regional organizations. Among creditors, the Export-Import Bank of China and the Chinese Development Bank are leading - they account for 79% of the allocated funds. The top ten borrowers are Angola, Ethiopia, Kenya, Zambia, Egypt, Nigeria, Sudan, South Africa, Cameroon, Ghana, which received 69% of the loans.
This amount is 64% of the lending to African countries by the World Bank ($264.15 billion) and is almost 5 times higher than the loans issued by the African Development Bank ($36.85 billion).
Compared to the period before the COVID-19 pandemic (2017-19), lending volumes decreased - an average of 37% (from $213.03 to 135.15 million). The number of loans also decreased sharply - from 184 to 32. For 2021-2022 alone. African countries received 16 new loans worth $2.22 billion. Of these, in 2021 there are 7 loans ($1.22 billion), in 2022 - 9 ($994.48 million). Thus, for the second year in a row, the volume of annual lending to African countries does not exceed $2 billion.
In 2021-22. among the largest creditors, the Export-Import Bank of China is still in the lead (9 out of 16 loans, $1.42 billion, 64%), which allocated 53% of all credit funds to Africa in 2000-2022. But the Chinese Development Bank in 2021 did not issue a single loan, and in 2022 - only a small loan in the amount of $14.74 million as part of a co-financing program for a water treatment project in Senegal.
The main recipients of credit money were Senegal Benin Kot-d Angola,,,,,,,. Uganda Ghana Rwanda DRC It is noteworthy that for the first time in 20 years, the largest recipients were the countries of West Africa, while out of the 10 historically largest borrowers, only two countries received new loans - Angola and Ghana.
The main sectors where lending was directed were transport (44%), environment (21%), ICT (12%), education (10%), defence (6%), water, sanitation and waste management, industry, trade and services. But if until 2021 most of the borrowed funds - 35% - were sent to the energy sector, then in 2021-2022. not a single new energy project was financed.
The reduction in lending is not associated with a pandemic - it has been due since 2016, apparently, to a revision of investment policy priorities, a reaction to criticism of the systemic shortcomings of the Chinese lending model of developing countries, and a general slowdown in the PRC economy. Therefore, a decrease in the number of large loans (in the amount of St. $500 million) and an increase in the number of small (up to $50 million) loans for projects with greater social and environmental returns.
Investment in South America
In 2022, the PRC seeks to expand its sphere of influence through the so-called "South-South cooperation" - a development program focused on partnership between developing countries.
Renewed investment in Australia after several years of decline and reduced investment in the United States
2021: China is the world's largest sovereign lender to emerging economies
China has become the world's largest sovereign lender to emerging economies as part of expanding business and influence, which mirrors the spread of US economic power in the 20th century.
2020
Accumulated $245.8 billion of investments abroad in the energy sector
China overseas power funding in 2020 slumps to lowest level since 2008 after global pandemic COVID-19 has suspended deal-making in developing countries.
Financing of foreign energy projects, including power plants and mines, decreased by 43% to $4.6 billion. More than half of the loans were issued for a gas pipeline project in Nigeria.
Since 2000, the China Development Bank and the Export-Import Bank of China have provided $245.8 billion in financing to the energy sector, according to Boston University.
Almost 80% of these transactions were carried out under the Belt and Road initiative.
China, UAE lead Africa investment
2019: Which countries owe China
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