From the first swathe of foreign capital coming in, to the latest Chinese funds moving out, money flows are the best indicator of investment interest and economic structures. What's new this year for international investors? Extending partnerships with China into third markets when Chinese investors are getting more risk-shy. That's the view of Vaughn Barber, a financial advisor in the greater China market for almost 2 decades, in his China outlook report 2018.
Barber says China's domestic market will be further integrated into international companies' global supply chains. The challenge is how to keep China's investment destination lustre, now that preferential policies for foreign companies are gone and local players are more competitive. How are foreign investors becoming more risk-savvy in China?
XIA CHENG BOAO, HAINAN "China is assertive when it comes to what its economy wants. That's why international investors are trying to align their value proposition to better fit in China's social and economic goals. Many of them choose to come to events like the Boao Asia Forum to move the needle on business here. China is also banking on such opportunities to bid for market access overseas. One of the hottest assets for all is technology."
But that creates trade tensions, especially the ongoing row between China and the US. Is that hurting the investment vibe in China's tech space?
Wu says going global is now a basic mindset among Chinese tech entrepreneurs, and capital is accelerating such an outbound drive. That means Chinese companies will continue to knock on more doors overseas, and reciprocally, help international investors gain access into China's home turf. As China remains strict on risk control and market regulation, while testing new businesses, there's still first mover advantage for international investors to build up trust for policy priorities.