Hidden Story in China’s FDI Statistics

Investors around the world seek secure places to store assets. Chinese firms and individuals hold enormous amounts of liquid money, and many seek to diversify with non-Chinese assets. Farok J. Contractor, professor at Rutgers, suggests that Chinese firms may be creating subsidiaries to ease transfers, which explains why as much as 70 percent of outbound foreign direct investment capital from China flows to Caribbean nations and Hong Kong.