Allen Shyu Quoted in China Business Law Journal on Slowdown in China’s Outbound Investment Flow
China Business Law Journal has quoted Akin Gump corporate partner Allen Shyu in the article “The great outflow,” which reports on the disruption this year to China’s outbound investment flow.
As a result of the COVID-19 pandemic, the article reports, global economic currents have been upended, and the flow of funds has seen disruptions and reversals. China, as an example, has seen its investments in countries across the world plummet.
According to Shyu, many Chinese industrial businesses have had a difficult year. “Profits are lower across the board and labor costs are rising,” he said. “We have seen many more bankruptcies in 2020. The consolidation of industries will be the main solution in the future. For example, more struggling smaller banks will be bailed out through merging with one of China’s larger banks.”
Meanwhile, the article says, there may be some signs of Chinese investment picking up steam.
“Retail sales remain strong, despite fears around the trade war,” said Shyu. “Additionally, despite market restrictions, real estate sales are growing, driven by urbanization and upgrading. With such domestic consumption driving economic growth, it is expected that this creates more opportunities for Chinese businesses.”
In Europe, Shyu said the Chinese “are interested in investing in consumer-facing services, internet-enabled companies, and the health- care, education, travel and leisure sectors. Sectors where the Chinese government actively encourages investment include AI [artificial intelligence], manufacturing and the internet of things [IoT], biotech and advanced materials.”