What are the Chinese buying?
In this paper Fuest and al. use a large dataset on cross-border M&A deals to identify the type of Chinese foreign acquisitions. They find that:
- Chinese acquirers buy targets with lower profitability, larger size, higher debt levels, and more patents.
- Chinese state-owned acquirers are similar to government-led acquirers from other countries in pursuing target firms in the resource extraction
- Policy initiatives like the Belt and Road Initiative and Made in China 2025 influence investment patterns of Chinese state-owned acquirers but not those of private investors.
- Chinese investors pay less for firms with similar observable characteristics than investors from other countries.
Chinese acquisitions abroad: are they different?
Authors: Clemens Fuest, Felix Hugger, Samina Sultan, Jing Xing
From: University of Munich, Shanghai Jiao Tong University
How does the world perceive the Belt and Road Initiative?
Countries’ Perceptions of China’s Belt and Road Initiative: A Big Data Analysis
Authors: Alicia Garcia-Herrero, Jianwei Xu
From: The Hong Kong University of Science and Technology, Beijing Normal University
Challenges created by Chinese investments
- Unsustainable financial burdens: Chinese lending to some countries has increased their risk of debt default or repayment difficulties, while certain completed projects have not generated sufficient revenue to justify the cost.
- Erosion of national sovereignty: Beijing has obtained control over select infrastructure projects through equity arrangements, long-term leases, or multi-decade operating contracts.
- Geopolitical risks: Some infrastructure projects financed, built, or operated by China can compromise the recipient state’s telecommunications infrastructure or place the country at the center of strategic competition between Beijing and other great powers.
Grading China’s Belt and Road
Authors: Daniel Kliman, Rush Doshi, Kristine Lee and Zack Cooper
From: Brookings, American Enterprise Institute