By Neil Carabine,Partner of KWM Australia
China’s outward foreign direct investment (FDI) has increased substantially over the past decade. At US$111.5 billion in total in 2015, outbound FDI exceeded inbound FDI for the second year running. Aided by the creation of new / simplified regulatory channels, China’s outbound FDI is expected to grow more than 10% per year for the next five years . China’s 13th Five Year Plan has also encouraged acquisitions and investments by Chinese investors in a wider range of sectors (e.g. fintech, high-end manufacturing and real estate).
A significant increase in infrastructure investment is also expected following the implementation of China’s “Silk Road Economic Belt” and “21st Century Maritime Silk Road” policy (known as One Belt, One Road or OBOR). In just the first quarter of 2016, Chinese investors have already made US$3.59 billion of direct investment into OBOR countries (mainly Singapore, India and Indonesia), a 40.2% increase versus the same period in 2015 (according to MOFCOM). With Chinese investors looking to play an increasingly important role in global markets, this article will look at some of the key steps investors can take to mitigate their risks, as well as the legal protections available to safeguard their investments.
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