China overtakes US to become largest global investor

With the dynamics of the global economic order changing, China has now overtaken the US to become the largest global investor.

China has signed the highest number of overseas deals in the first half of 2016. The deals mostly include the purchase of foreign companies, amounting to $110.8 billion.

China broke its own full-year record in 2015 when firms spent $106.8 billion on foreign acquisitions. China’s leading firms were involved in 17 deals worth more than $1 billion, while the rest were of lower valuations.

The US has been topping the rankings in overseas acquisitions since 2007. However, China’s acquisition spree is partly driven by economic slowdown in the country. Chinese companies with surplus funds are finding it difficult to identify suitable investment targets in China.

Anti-China sloganeering by US Presidential aspirants like Donald Trump and Bernie Sanders has not done much damage to hinder Chinese investments in the US. As many as 25 US and Canada-based firms were acquired by Chinese firms in 2015, compared to just four in 2014 and nine in 2013.

Many leading analysts had said that Chinese investments overseas would more than double the 2015 record because companies are targeting over 1,000 foreign firms for acquisition in 2016. Leading Chinese business houses took control of 598 companies last year. One of the major reasons behind China’s acquisition spree is relocating the country’s excess manufacturing capacity to Africa, Latin America, Europe and elsewhere, where capacities are needed.

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