China could be biggest global investor by 2025 and gain geopolitically

China is expected to invest $169bn in infrastructure in the UK between 2014 and 2025, according to a report by law firm Pinsent Masons. Most of this money, $70bn, will go into Britain’s energy sector, with property and transport expected to receive $58bn and $31bn respectively.

The most likely investment route for Chinese capital is through joint ventures, and the ultimate aim is to increase the market for China’s manufacturing industries, in particular heavy engineering and building materials.

The UK is third in attracting infrastructure investment from China, behind the US and Japan. China’s total outbound investment is estimated to increase from about $100 billion in 2013 to $600 billion in 2025.

If China moves to outbound foreign direct investment of $600 billion in 2025 then this would likely surpass the US level of foreign investment unless the US nearly doubles outbound investment

Chinese President Xi Jinping said the new US$50 billion Asian Infrastructure Bank (AIIB) would use the best practices of the World Bank and the Asian Development Bank, said Reuters.

The authorized capital of the bank would be US$100bil; the AIIB would be formally established by the end of 2015 with its headquarters in Beijing.

There was a huge demand for infrastructure investment in Asia; the Asian Development Bank (AIIB) put that at around US$8 trillion of investment during the current decade.

There is a 264 page UN World Investment report

Foreign investment is used by China to gain geopolitical influence and to get access to resources in places like Africa.

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