Chinese money is pouring out of the country into everything from residential real estate to fertiliser companies, and all indications suggest this trend will accelerate. But global and national institutions, particularly governments in western countries, are not prepared for this flood of cash.
Chinese investment in offshore mergers and acquisitions has already reached $106bn so far this year, almost as much as the $109bn total for all of last year. In addition, a single Chinese company, Anbang Insurance, offered $20bn this month to buy two US hotel chains — Starwood Hotels and Strategic Hotels & Resorts. Individual Chinese property buyers are now the single largest group of foreign investors in real estate in most western, English-speaking cities.
Integrating Chinese companies and investors into the global economic order is surely beneficial. Rising protectionism in the west will prompt retaliation in China and empower those within the Chinese system who argue Beijing should subvert and eventually replace the existing US-led global order. This is a larger constituency than many in the west realise, although proponents are still not the dominant ideological force in Chinese politics.