Macroscope | China’s outbound investments have hit a snag, but its M&A in Asia and Oceania show it’s still the face of globalisation
- At first glance, China’s declining outbound investment appears to confirm the seeming retreat from globalisation. Yet, while M&A has declined in Europe and the US, look to its activity closer to home for a glimpse of the future
At first glance, the outlook for China’s outbound M&A is not positive. Nonetheless, there is reason to remain confident that such investments will rebound in the longer term. In fact, we would go so far as to say that Chinese outbound investment may be the new face of globalisation.
The first wave of globalisation came out of a new US-backed international order. In the 20th century, American companies like Coca-Cola and McDonald's led a tidal wave of globalisation that exported the American way of life – including food, consumer goods and culture – to almost every country and territory in the world, including Asia.
However, in recent years, China has significantly stepped up its efforts to extend its influence globally. Perhaps no project represents China’s globalisation drive more clearly than the Belt and Road Initiative, an ongoing outbound investment strategy that aims to recreate China’s ancient Silk Road trade routes to Europe and the Middle East via two corridors, one by land and one by sea.