Conference Presentation, Panel
China's Outbound Investment: A Bid for Influence or Better Returns?
Milken InstituteKevin, Jordi, Jim, Andre, Andrei, David Choe, Andrea Mitchell, Mark Christopher, Michael Kennedy
- China's outbound investment volume is projected to surpass inbound foreign direct investment substantially over the coming years, growing at an average annual rate of 17% to 18% over the last five years, three times faster than GDP.
- Investment focus is shifting from infrastructure and industrialization toward technology, biotechnology, and new energy, with a significant trend expected over the next decade to move from domestic investment-driven growth to overseas infrastructure export.
- Strategic direction will be highlighted in the upcoming 13th Five-Year Plan, though private entrepreneurs are primarily driven by asset diversification needs and SOEs by governance requirements despite anti-corruption risks.
- Private capital is increasingly flowing into US dollar and euro-denominated assets due to the absence of RMB appreciation expectations, while real estate investors seek higher returns abroad compared to domestic markets.
- Fosun aims to execute 15 annual deals with a frequency of nearly one closing per month, predicting more deals in the coming year and the emergence of more companies following its strategic investment model.
- Fosun expects Folli Follie's retail store count in China to exceed its global total within two to three years.
- Minority stakes in European firms are predicted to become a preferred strategy to avoid political backlash, while Chinese companies are expected to lead innovations in anti-pollution, battery technology, and electric cars over the next five years.
- A Chinese global company is forecast to become the world's largest within five years, implying massive price appreciation, while limited access to domestic Chinese companies is expected to improve through continued deregulation and product creation.
- The primary macro trend for the next ten years involves a rebalancing toward overseas investment-driven growth rather than a shift toward domestic household consumption.