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China
July 31, 2017

Risky business: Keeping an eye on Chinese investment

by
Henry Jackson Society

By John Hemmings

If money talks, Chinese money is particularly loud these days. In the past five years, Chinese investment abroad — largely dominated by the country’s giant state-owned enterprises — has tripled. Today, China accounts for nearly 10 percent of global foreign direct investment outflow.

In an era of austerity, influxes of investment are often appreciated. But not all Chinese money receives a warm welcome — as evidenced by Germany’s recent decision to limit investment into its strategic infrastructure. This is especially true when it comes to granting China access to Western infrastructure, sensitive telecoms and high-tech companies.

Western countries are right to pay careful attention to what Chinese companies do with their money. The trouble, however, is there is no agreed-upon standard for determining when an investment poses a security risk — and no coordination even among the closest Western allies in deciding which investments should be blocked. As Chinese money continues to flow westward, the future of European and North American security could depend on governments in those regions coming up with a common policy on where that money can be spent.

Read the full article in Politico