Following the Money Chinese OFDI in the United States and Europe - - PowerPoint PPT Presentation

following the money
SMART_READER_LITE
LIVE PREVIEW

Following the Money Chinese OFDI in the United States and Europe - - PowerPoint PPT Presentation

Following the Money Chinese OFDI in the United States and Europe Thilo Hanemann Research Director thanemann@rhg.com Tsinghua University | Beijing | September 23, 2013 10 East 40 th Street, Suite 3601, New York, NY 10016 Tel:


slide-1
SLIDE 1

Chinese FDI I Tsinghua University 1 10 East 40th Street, Suite 3601, New York, NY 10016 Tel: +1.212.532.1158 | Fax: +1.212.532.1162 | Web: www.rhgroup.net Address: 5 Columbus Circle, 18th Floor, New York, NY 10019 | Tel: +1.212.532.1158 | Fax: +1.212.532.1162 | Web: www.rhg.com

Following the Money

Chinese OFDI in the United States and Europe

Thilo Hanemann

Research Director thanemann@rhg.com

Tsinghua University | Beijing | September 23, 2013

slide-2
SLIDE 2

Chinese FDI I Tsinghua University 2

China’s Ascent to the World’s Third Largest FDI Exporter

Countries’ % share of total global OFDI flows, 3 years moving average

Source: UNCTAD, Rhodium Group.

0% 5% 10% 15% 20% 25% 30% 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

UNITED STATES JAPAN

HONG KONG

CHINA

GERMANY

FRANCE INDIA

slide-3
SLIDE 3

Chinese FDI I Tsinghua University 3

China’s Global OFDI: Three Different Perspectives

Percent share of global OFDI stock

Source: MOFCOM, IMF, Bloomberg, Thomson Reuters, *transactions ending in final stake of 10% or more.

Hong Kong, 27% United Kingdom, 10% Australia, 9% Brazil, 8% Canada, 7% US , 6%

Switzerland , 4%

South Africa, 3% Singapore , 3% All other , 23% Hong Kong, 62% British Virgin Islands, 7% Cayman Islands, 5% Australia, 3% Singapore , 2% US, 2% Rest of World, 19% Hong Kong 76% Singapore 5% Mauritius 3%

Luxembourg 3%

Australia 3% Canada 2% All Others 8%

MOFCOM (2011): $425 BN 87 CDIS ECONOMIES (2011): $510 BN M&A (2000-2012): $252 BN

slide-4
SLIDE 4

Chinese FDI I Tsinghua University 4

China’s Global OFDI: Alternative Approaches

Source: Rhodium Group

INSTITUTION DATABASE GEOGRAPHIC FOCUS COVERAGE Heritage F Foundation China Investment Tracker Global Non-Bond Investments over $100 million A-Capital Dragon Index Global M&A and some unexplained residual TA TAC ChinaObs/FDI Monitor Europe M&A and greenfield transactions Antwerp M Management School Euro-China Investment Report Europe Chinese companies Univ niversity of

  • f Sydn

dney Demystifying Chinese Investment Australia M&A transactions Rhodium G Group China Investment Monitor United States and Europe M&A and greenfield transactions

slide-5
SLIDE 5

Chinese FDI I Tsinghua University 5

Chinese FDI in the US: Official Data (2011)

USD billion

Source: Rhodium Group.

3.7 9.5 13.5

2 4 6 8 10 12 14 16

FDI Stock (2011) FDI Stock, UBO (2011) FDI Stock (2011)

US BUREAU OF ECONOMIC ANALYSIS CHINA'S MINISTRY OF COMMERCE

slide-6
SLIDE 6

Chinese FDI I Tsinghua University 6

Chinese FDI in the US: RHG Transactional Data, 2000-2012

Number of deals and USD million

Source: Rhodium Group. 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

10 20 30 40 50 60 70 80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Investment in M&A Deals (RHS) Investment in Greenfield Projects (RHS) Number of M&A Deals (LHS) Number of Greenfield Projects (LHS)

slide-7
SLIDE 7

Chinese FDI I Tsinghua University 7

RHG: Chinese Direct Investment in the US vs. EU, 2000-2012

USD million

Source: Rhodium Group.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Chinese FDI in the United States Chinese FDI in the EU-27

slide-8
SLIDE 8

Chinese FDI I Tsinghua University 8

RHG: Chinese FDI in the United States by Industry: 2000 – 2012

Number of deals, total investment value in USD

Source: Rhodium Group.

OIL & GAS

AVIATION

AUTO PARTS

COMMUNICATIONS EQUIPMENT

ELECTRONICS

SEMICONDUCTORS

MEDICAL EQUIPMENT

INDUSTRIAL MACHINERY

METALS RENEWABLE ENERGY

SOFTWARE & IT

BUSINESS SERVICES

FINANCIAL SERVICES

UTILITIES ENTERTAINMENT & HOSPITALITY

REAL ESTATE

1,000 2,000 3,000 4,000 5,000 6,000 10 20 30 40 50 60 70 Total al I Inves estmen ent Val alue Num umbe ber of

  • f Deal

eals

PRIMARY SECONDARY TERTIARY BUBBLE SIZE INDICATES TOTAL INVESTMENT VALUE

slide-9
SLIDE 9

Chinese FDI I Tsinghua University 9

RHG: Chinese FDI in the EU and US by Industry, 2000-2012

USD million

Source: Rhodium Group.

1,000 2,000 3,000 4,000 5,000 6,000 7,000

Semiconductors Business Services Healthcare and Medical Devices Electronics and Electronic Parts Hospitality and Tourism Other Transportation Equipment Pharmaceuticals and Biotechnology Aerospace Equipment and Components Financial Services and Insurance Software and IT Services Renewable Energy Real Estate IT Equipment Food Processing and Distribution Metals and Minerals Transportation Services Entertainment, Media and Publishing Chemicals Consumer Products and Services Automotive Equipment and Components Industrial Machinery and Tools Utilities Coal, Oil and Gas

US EU

slide-10
SLIDE 10

Chinese FDI I Tsinghua University 10 10

RHG: Chinese FDI in the US by State: 2000 – 2012

Source: Rhodium Group.

slide-11
SLIDE 11

Chinese FDI I Tsinghua University 11 11

RHG: Chinese FDI in the US by Source Province*: 2000-2012

Source: Rhodium Group; * Source provinces coded by headquarter of the investing company.

PRIV 72% SOE 28% PRIV 37% SOE 63%

  • NO. OF DEALS

DEAL VALUE

slide-12
SLIDE 12

Chinese FDI I Tsinghua University 12 12

RHG: Employment at Majority Chinese-Owned US Firms

USD million, number of jobs

Source: Rhodium Group. 1,000 2,000 3,000 4,000 5,000 6,000 7,000

5,000 10,000 15,000 20,000 25,000 30,000 35,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Investment in M&A Deals, USD mn (RHS) Investment in Greenfield Projects, USD mn (RHS) Total Jobs (LHS)

slide-13
SLIDE 13

Chinese FDI I Tsinghua University 13 13

RHG: Troubled Chinese Investments in the United States

Source: Rhodium Group.

YEAR ACQUIRER TARGET STATUS 1990 China National Aero Tech Mamco Manufacturing Blocked by President 1995 CNIEC/Hua San/Sextant Magnequench Completed Lenovo IBM Completed Haier Maytag Withdrawn, Commercial Reasons CNOOC Unocal Withdrawn, Politicized Minsheng Bank UCB Blocked by Federal Reserve Huawei 3Com Withdrawn after CFIUS Review Tengzhong Hummer Withdrawn after MOFCOM Intervention Northwest Nonferrous Intl. Firstgold Withdrawn after CFIUS Review Anshan Steel Greenfield, Mississippi Pending Tangshan Caofeidian Emcore Withdrawn after CFIUS Review China Aviation Ind. Cirrus Completed Huawei 3Leaf Dissolved after CFIUS Review Ralls Corporation Terna Energy Holding USA Corp. Blocked by President Beijing Superior Aviation Hawker Beechcraft Inc. Withdrawn, Commercial Reasons Wanxiang Group A123 Completed Shuanghui Smithfield Foods Pending 2013 2005 2009 2010 2011 2012