The American Enterprise Institute and Heritage Foundation’s China Global Investment Tracker is the most complete publicly available record of China’s investment and construction worldwide. Helpful if you are trying to get an accurate assessment of China’s economic position without counting on unreliable Chinese government reports.
Using this tool to take a close look at what the Chinese Communist Party has claimed in regards to out-bound investment over the past 18 months, Derek Scissors comes to the blunt conclusion in this new report for AEI: it doesn’t make any sense.
The balance of evidence, he writes, points to the fact that investment in 2020 and 2021 dropped far more than the Chinese government insists.
“The Chinese government continues to claim overseas investment and construction have seen little impact from the pandemic, but examining corporate disclosures indicates otherwise. While the China Global Investment Tracker shows investment jumping, it is jumping from a very small base. Construction deals are not being implemented.”
But while Chinese global investment and construction may or may not rebound enough in 2022 to threaten Western interests, the real risk at the moment is increasing capital flow into China coupled with ongoing IP theft and technology loss, writes Scissors.
He highlights that while Chinese investment has cratered, total U.S. investment in China now exceeds $1 trillion USD.
“The risk has shifted to American investment shifting to the PRC, which can promote technology development, assist the People’s Liberation Army, or help suppress basic rights.”
Inbound Chinese investment provoked a serious policy response, Scissors concludes, but not enough is being done now to confront this new reality.
