The flow of outbound investment from China to the rest of the world soared in 2015. With rising economic problems at home, Chinese companies now prefer assets in developed markets like the United States.
Chinese investments in the United States reached a new record level of $15.7 billion in 2015, up 30 percent from last year, according to Rhodium Group. Mergers and acquisitions (M&A) activity was particularly strong with 103 deals worth $14 billion. Greenfield projects, where companies start building their operations from scratch, also reached an all-time high of $1.8 billion in 2015.
New York and California were the most popular states, attracting more than half of the funds during that period.
The industry composition of Chinese foreign direct investment in the United States was more diverse in 2015 compared to previous years. Investments by Chinese companies spread across a wide range of sectors including real estate, financial services, information and communications technology, automotive, health and biotech, energy, and entertainment.
US Real Estate Seen as Safe Haven
With the stock market crash in China that began in June 2015, Chinese are investing even more in U.S. real estate, which is considered a safe haven. The real estate and hospitality industries attracted 39 deals, accounting for 33 percent of the total sum.
The largest transaction in real estate in 2015 was Anbang Insurance’s $1.95 billion acquisition of the New York Waldorf Astoria hotel. This acquisition set a record for the largest acquisition of a U.S. real estate asset by a Chinese buyer.
Investors have also been motivated by the shift in the Chinese regime’s policy to promote outbound investments. Regulations prohibited Chinese insurers from buying foreign property in the past. However, they can now invest up to 15 percent of their total assets in offshore holdings including real estate.
Investor Caught Up in Beijing Probe
