Focus between Southeast Asia and the Mediterranean
Chinese investment in the U.S. is at its lowest level since 2008, falling from 46 billion U.S. dollars in 2016 to 4.8 billion in 2019, a tenfold reduction.The Trade War and tensions over the management of the health emergency have made clear the trend which will be accelerated by the resolution of the US Senate calling for the de-listing of Chinese state companies.
China seeks new regions to allocate its capital, but on what basis? Beijing is promoting new geo-economic trends with a focus in Southeast Asia, Africa and Europe. In this context of geographical conversion, Italy seems to play a key role in the attraction of FDI into the Old Continent.
According to data from the Chinese Ministry of Commerce, there will be 117 billion dollars of foreign investment in 2019, mainly in the technology, telecommunications and energy sectors.
California, Los Angeles and Silicon Valley have long been the target for Beijing in the U.S (31 billion U.S. dollars inbound from China to California since 2009) followed by New York and Texas, according to data from the National Committee on US China Relations, but today the scenario has changed.
Chinese investment in Europe was directed towards Finland and the UK in 2019 and now in 2020 it appears to be the Mediterranean which is at the heart of Beijing's interests. Over the past 10 years, Chinese direct investment has amounted to more than EUR 50 billion in the UK, 22.7 billion in Germany and around 16 billion in Italy.
In Africa, Beijing invests in the countries with the largest population and development; in Lagos and on the coast of Nigeria through railways, in South Africa with the construction of a new metropolis outside Johannesburg and in Algeria with airport, highways and infrastructure.
Asia remains the main target, in 2019 more than a third of M&A projects carried out have flowed into the region. The flow of investment in Africa (up 26%) Asia (up 19%) is in contrast to the trend in Western countries. This is also confirmed through the number and value of infrastructure projects and EPC contracts in Belt Road countries: in 2019 amounting to 155 billion dollars (2/3 of the total outbound Chinese investment) with an increase of 23%.
Beijing has chosen the south of the world for its leading role: Southeast Asia, Africa and southern Europe, in Italy and Greece.
The Faw Group, a historic Chinese automotive brand, has announced a one-billion-euro investment plan for the design and production of electric cars in the Emilian Motor-Valley. This is a green-field investment that could generate thousands of jobs.
This is the latest in a series of projects Beijing is undertaking in various Italian regions: just think of President Xi's visit to Sicily in 2019 to promote tourism and a strategic area or investment in the port of Trieste, for Belt Road logistics.
China therefore points to the South, far from the USA: in Southeast Asia and in the Mediterranean between North Africa and southern Europe.
Article originally was published on Affaritaliani in Italian.