Japan Today reports today that China has now become the third largest source of foreign direct investment in the world. And the biggest national recipient of that foreign direct investment is the United States. China’s foreign direct investment grew 8.5% in 2011 and the Chinese government is encouraging Chinese companies to go international. Indeed, the Chinese “government aims to increase overseas direct investment at an average annual rate of 17% through 2015 to $150 billion” according to the Japan Today report. Importantly, “the top destination for overseas Chinese investment last year was Hong Kong, while the US rose to second place with $4.05 billion invested, surging 123.5 percent from 2011.”
A looming sea-change for US lawyers
Why are these figures so important to US lawyers? Because for many decades – as I’ve outlined before – most sources of foreign investment into the US have been European. And with China’s rapid rise in overall US-focused foreign direct investment – US lawyers ought to be ramping up their business development focus on China to near the levels they’ve focused previously on Europe – in order to capture what is sure to be growing and lucrative cross-border work emanating from China.
Recent Chinese overseas deals
Japan Today reports that:
- “In May 2012, China Three Gorges, operator of the world’s biggest hydro-electric dam, closed a deal to buy a 21.35 percent stake in power generator Energias de Portugal for 2.7 billion euros ($3.56 billion).
- In November, sovereign wealth fund China Investment Corp (CIC) acquired a 10 percent stake in Britain’s Heathrow Airport for 450 million pounds ($704 million).
- CIC was set up in 2007 with $200 billion to make better use of China’s colossal foreign exchange reserves that now amount to nearly $3.5 trillion, and its total assets stood at $575.2 billion at the end of 2012.”
“The [Chinese] government aims to increase overseas direct investment at an average annual rate of 17% through 2015 to $150 billion.” “By end of 2012, Chinese companies employed 1.49 million staff overseas, about half foreign citizens, the report added.” These figures mean real deal work for those US lawyers that make the effort to capture it.
John Grimley helps law firms, law firm practice groups, individual lawyers, financial services and governmental relations professionals develop and implement custom business development initiatives. To enquire about his services, contact him at +1.213.814.2855 or at email@example.com.