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1 1 (January 2017)

handle is hein.amenin/aeiaapo0001 and id is 1 raw text is: Key Points * China's investment around the world grew almost 50 percent in 2016 to approximately $175 billion. It has now doubled in size since 2012. * China's global spending surge is due primarily to investment in the United States, which exceeded $50 billion in 2016. Acquisitions by private enterprises are at its heart. * Energy made a surprise comeback in 2016, leading all sectors in drawing Chinese funds. However, a bigger story was a jump in attempted and successful technology acquisitions. * This year will be weaker than last. Total investment may or may not fall, but diversification by country, sector, and the Chinese companies is likely to decline. * American policy should be based on actions by China and Chinese investors, reciprocity and obeying US law, respectively, rather than nominal state ownership. Chinese outward investment set records in 2016, but it is hard to be confident about the numbers. The amount of money leaving the People's Republic of China (PRC), sometimes illegally, is so large that picking out genuine investment has become a challenge. It can suit Beijing to label capital flight as investment. Independent observers occasionally include acquisitions both in the year announced and again in the following year when completed. The China Global Investment Tracker (CGIT), from the American Enterprise Institute and The Heritage Foundation, is vetted, with each transaction detailed in the only fully public record of the PRC's investment and construction.' Vetting yields an initial estimate of $170 billion in Chinese outward, non-bond investment last year, a 46 percent increase over zo5. There was explosive growth from the start, and worries about a weakening renminbi helped support a quick pace until December, when Chinese authorities became belatedly alarmed over money leaving the country. Record-breaking totals mean records for sectors and countries. Energy investment, including gas and alternative energy, intensified over the course of the year, with more than $30 billion ultimately allocated. While this is a return to the past, technology acquisitions touching $25 billion constitute a sharp change. Another new development was nearly $20 billion invested in tourism, primarily hotels. By country, the previous high for Chinese spending in the US was nearly tripled to over $50 billion (initial estimate) in 2016, by far the top national figure. The US accounted for 30 percent of the PRC's outward investment last year. Three other countries-Britain, Brazil, and Germany- surpassed $10 billion, which would have been extraordinary as recently as 2012. AMERICAN ENTERPRISE INSTITUTE

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