China Center Quick Note: China's New "Going Out"

China's big commodities players (CNPC, CNOOC, Minmetals, etc.) were at the heart of China's old “going out” story. The new story is a diversified approach to OFDI and market-building abroad, based on three kinds of players: old-economy SOEs supporting the Belt and Road initiative, nominally private enterprises expanding and diversifying in the West, and anointed new-economy SOE champions seeking to fulfill national goals on a global scale.

China’s current OFDI trends may be a bubble, however, enabled by too much liquidity and an overvalued RMB and a generally distressed seller’s market in much of the world. Looking forward, concerns over capital outflows mixed with fiscal reality-checks at home may make China’s new Going Out a short-lived adventure – or at least reduce it to a machination of much smaller scale.

For MNCs seeking alignment opportunities while the new Going Out still has momentum, doors are increasingly opening as China’s financing resources come under further pressure.

China Center Publications
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