This document summarizes China's growing investments abroad and the opportunities and challenges they present. It discusses China's investments in countries like the US and France. The main reasons for China's global investments are to access new markets, acquire technology and skills, and develop capabilities to better compete at home. However, challenges include concerns about China's legal and financial systems as well as a lack of experience operating overseas. Both opportunities like new jobs and markets and continuing challenges around transparency and technology transfer were presented.

1. China’s Investments Abroad
Opportunities and Challenges.
12th November 2014
Presented by: Abhishek Patel
Business Administration UG Year 3

2. Introduction
As China's economic growth continues, both the total volume and
types of Chinese investments abroad have grown rapidly. This
includes portfolio investments made by the Chinese sovereign
wealth funds, SOEs, and private companies in energy, natural
resource, agriculture, manufacturing, and real estate.

3. China’s Global Reach
(Heritage.org)

4. China’s Investments: USA
(Heritage.org)

5. China’s Investments: France
(Heritage.org)

6. Reasons for China’s Global Reach
A clear agreement on the business driven motives of Chinese
investments..
‘Getting up the value chain’
• Access to markets
• Technology know-how acquisition and R&D capability
development
• Skilled labour
• Develop capabilities to compete better at home

7. Reasons for China’s Global Reach

8. Challenges faced by China Abroad
China’s Financial system
With regard to Hong Kong, it is considered that “one
country, two systems” it is unlikely to change because the
mainland understands the benefit of Hong Kong, while the
West trusts the Hong Kong financial and legal system.

9. Challenges faced by China Abroad
China’s legal system
West still has concerns about the Chinese legal
system. Concerns about lack of transparency,
closed procurement and hidden subsidies.

10. Other Challenges faced by China Abroad
• Chinese fears non-transparent national barriers and security
concerns.
• Countries wants China to offer:
• Market access to their firms in China in return for
comprehensive investment protection
• Lack of skills and experience (post-establishment)
Taking an example of Germany, the division of labor – high-tech in
Germany, low-tech in China – chosen in some cases, makes transfer
of know-how and technology difficult.

11. Challenges faced by China in the EU

12. Welcoming Chinese Investment in the countries :
Opportunities
• Direct benefits, e.g., employment, tax
• Indirect benefits, e.g., access to Chinese market
• For example, Taking the current low level of
investments in the EU as a positive sign for further
growth.
• Growing Chinese investment in developed
economies could open up new opportunities for
private investment in China’s domestic market.

13. Most Critical issue while Investing in China

14. Reasons for China’s Global Reach

15. “We are still students trying to learn global management.
Our overseas workforce is sometimes qualified to be our
teachers in this area. It is
very difficult for ‘students’ to manage ‘teachers’ as we go
global.”
– Tong Hai Bin, Shanghai Machine Tools
What they say:
In terms of the relationship with the Chinese government,
Alibaba founder Jack Ma’s famous words resonate, “Fall in
love with them, understand them, but don’t marry them.”

16. Thank You