China’s overseas investment is heading for an eight-year high as its dominant firms build more factories abroad, a shift that could soften criticism of Beijing’s export drive.
“China wants to produce overseas so the trade surplus is reduced and most importantly, overcapacity is reduced,” said Alicia Garcia Herrero, chief Asia Pacific economist at Natixis SA. “I expect this pace to continue very aggressively. But they will still face protectionism.” Chinese businesses have plowed cash into processing key materials, such as nickel mines and smelters in Indonesia. They’re making downstream investments, too. Chery Automobile Co. this week announced plans to become the latest Chinese carmaker to set up a plant in Thailand, aiming to start EV production next year.