Cyprus to Benefit from China's Surge of Overseas Investments

25/06/2015

Cyprus may be among the European countries to benefit from a projected surge in Chinese overseas investment, according to a new research.

Indeed, a report released by the Mercator Institute for China Studies (MERICS) has revealed that China's overseas investments are set to triple by 2020, turning the country into a driving force in global cross-border investment in the coming decade, as a result of the country’s policy liberalisation and adjustments to its growth model. 

The country extended some €46 billion in direct investments in European Union (EU) countries in the period 2000-2014. The UK received the majority of this, noting €12.2 billion in Chinese investment during the period, followed by Germany with €6.8 billion and France with €5.9 billion. Cyprus received a total of €4 million during 2000-2014, the report indicates and may be among the countries in the region to see an influx of Chinese investment in the years to come.

The shift in China’s global investment position, however, will require political leaders around the globe to adjust their economic policy configuration towards China both to reap the benefits of this next stage of global integration as well as minimizing potential new risks. 

This is particularly true for the countries of the European Union, the MERICS research highlights, whose economies are now intimately linked up with China following three decades of trade integration and significant investment of European businesses in China. The foreign direct investment (FDI) component called Outbound Foreign Direct Investment (OFDI) by the Chinese, will grow from $744 billion to as much as $2 trillion globally by 2020.

“China’s OFDI boom is only beginning and will likely continue in light of more liberal OFDI policies and changing commercial realities in the Chinese marketplace which are forcing firms to expand beyond China’s borders,” the report concludes
 

 


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