Until just two years ago, China Money (Chinese capital) was the biggest player in various real estate investments around the world. A huge amount of Chinese money flocked to investment targets that could be “a jackpot” such as a five-star hotel in New York, a super-luxury house in Beverly Hills, a Swiss chemical company, and a German robot company.But this has become an old story. This is because the entire West, including Europe, Japan, and South Korea, agrees with the U.S. administration’s “decoupling” (decoupling) and “dealing” (de-risk mitigation) on China, and Chinese capital, which had been concentrated in advanced countries, is flowing out like a low tide. China Money is rapidly withdrawing due to growing hostility toward Chinese capital in Western developed countries, the report said.According to think tanks such as the American Enterprise Research Institute (AEI) and U.N. statistics, China’s overseas investment fell 18% year-on-year to $147 billion last year. This is a 25% decrease compared to USD 196 billion in 2016, which peaked.
In particular, the decline in Chinese money is progressing steeper in developed countries. Chinese capital’s investment in G7 countries plunged from 120 cases of $84 billion in 2016 to 13 cases of $7.4 billion last year. This means that investment in advanced Western countries has decreased by more than one-tenth in seven years.China Money, which has escaped from the West, is focusing on mining and energy projects in Southeast Asia, the Middle East, and South America. Last year, Chinese companies and state institutions invested $24.5 billion in these regions, up 13% from the previous year. It reflects the Chinese government’s willingness to monopolize resources by preoccupying raw materials such as minerals.The biggest beneficiary of China Money, which has left advanced countries, is Indonesia. This is because Chinese companies, including state-run companies, flock to this place, which has abundant nickel, a key mineral in electric vehicle batteries, to buy mines and develop themselves.WSJ analyzed, “If you look at the flow of Chinese money, you can grasp geopolitical changes around the world at once,” adding, “China’s intensive investment in Southeast Asia and South America can create another conflict and crack there.” “The possibility of China’s capital investment returning to its past form is now almost gone,” he said. “As long as the decline of globalization has been confirmed, the world could face new geopolitical tensions in the future.”
JULIE KIM
US ASIA JOURNAL
