More Chinese firms might invest in countries along routes: PwC
The implementation of the "One Belt, One Road" initiatives will significantly encourage Chinese companies to invest and make acquisitions in countries and regions along the routes, particularly Southeast Asian countries, PricewaterhouseCoopers (PwC) China said in a report released Tuesday.
"Popular investment destinations will shift from developed economies in North America and West Europe to developing economies in Central Asia, East Europe, Southeast Asia and North Africa," Zhuang Shuqing, international tax services head of PwC Asia Pacific, said Tuesday.
Meanwhile, key investment industries will include infrastructure, electric power and high-end manufacturing such as auto manufacturing rather than mining and technology, the report said.
Large State-owned enterprises have advantages in investing in infrastructure and energy industries, while large private enterprises are strong in the manufacturing industry, according to Zhuang.
The establishment of the Silk Road Fund, the Asian Infrastructure Investment Bank (AIIB) and the BRICS' New Development Bank are all supportive measures to provide more financing methods for enterprises to make overseas investments, Zhuang said.
"With the unified plan and support from the Chinese government, Chinese enterprises will have more opportunities in investing in the countries and regions along the routes," Su Peike, chief researcher on public policy at the University of International Business and Economics, told the Global Times Tuesday.
"In the beginning, many Chinese enterprises are still reluctant to invest a lot into the regions so most of them will want to have a light presence first. Particularly, there are still many risks and uncertainties with the investment environment in the developing countries and Chinese enterprises should not invest blindly," Su added.
"Both the Chinese government and enterprises should figure out ways to avoid risks. For instance, companies will have to wait a long time to see returns when getting involved in infrastructure development because they may face many problems such as political uncertainty," Zhou Yu, director of the Research Center of International Finance at the Shanghai Academy of Social Sciences, told the Global Times Tuesday.
In fact, Chinese buyers have been quite active globally since 2014. The report from PwC shows that the number of China outbound investment deals climbed by almost one-third to reach a record high of 246 in 2014. Meanwhile, in the first quarter of 2015, China outbound deal value increased 36 percent to $20.2 billion and the number of deals climbed 33 percent to 77, both reaching historical highs, the report said.
The "One Belt, One Road" initiative, proposed by President Xi Jinping in 2013, refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives.
