Chinese companies boost overseas investment in consumer products, EV supply chain

cnbc.com:

BEIJING — Chinese companies invested more in consumer sectors and the electric vehicle supply chain worldwide, even as geopolitics restricted overall outbound capital flows, according to a report released Wednesday by Baker McKenzie and Rhodium Group.

Consumer products and services held the largest share of completed mergers and acquisitions last year, at $5.2 billion, up from $1.1 billion in 2020, according to the data. That still fell short of pre-pandemic levels of $10 billion in deals in 2019.

However, White House restrictions on inbound Chinese investment in tech and Beijing's efforts to keep capital within national borders have contributed to a decline in Chinese overseas deals. The high-tech and real estate sectors have been particularly hard hit, according to a release.

Overall, completed overseas mergers and acquisitions by Chinese companies dropped to $23.7 billion in 2021, down from $29.5 billion in 2020 and marking a fourth-straight year of decline, according to Rhodium Group data.

Including other forms of foreign direct investment, Chinese deals rose to $138 billion in 2021, up from $134 billion in 2020 and $117 billion in 2019, in line with a 71% increase in mergers and acquisitions globally between 2021 and 2020, the release said.

Chinese companies' direct investment in local subsidiaries, known as greenfield investment, in Europe and North America grew last year to $5.5 billion, from $4.7 billion in 2020 and $3.6 billion in 2019, the data showed.

The growth last year came from increased investments in Europe.

Several of the new greenfield projects the release listed for Chinese companies were of investments in the electric vehicle supply chain in Europe.

For example, Chinese battery giant Contemporary