China outbound investment picks up in bid for hi-tech upgrade
- Chinese foreign acquisitions bounce back this year as the country seeks out advanced technology the trade war with the United States
China’s outbound direct investment has gradually recovered this year, as the government encourages acquisitions of offshore hi-tech companies to help move the country up the manufacturing value chain.
Buying overseas talent and experience was seen as the fastest route for China to upgrade its technology and catch up with rivals like the United States and Germany, analysts said.
China plans to dominate 10 hi-tech sectors as part of its state-backed industrial “Made in China 2025” policy but the 10-year programme, which targets emerging industries like robotics, biotech and electric vehicles, is at the core of complaints from Washington that the ambitions are a threat to US national security.
Beijing has been downplaying the policy to avoid triggering further backlash from the West but the plan is still seen as the key to China’s future, even as the protracted trade war with the United States continues to weigh on China’s economic growth and investment returns.
To that end, the value of overseas mergers and acquisitions (M&A) by Chinese enterprises rose 11 per cent year on year to US$106.9 billion in the first three quarters, according to a survey by global consulting firm EY Consulting Services.
For the whole of 2017, China’s overseas M&A deal value sank by half from a year earlier to US$109 billion because of the harsh government crackdown on the excessive, risky overseas buying sprees by a number of Chinese companies.
