China’s Outbound Foreign Direct Investment (“OFDI”) has grown by more than 350% between 2007 & 2011, to $424 Billion USD at the end of 2011. Worldwide on average transitional economies invest 15% of their GDP to maintain their OFDI stock. Based on China’s current GDP level of USD $7.3 trillion, China OFDI has the potential to grow to over USD $1 trillion. Longer-term based on China’s projected GDP of USD $20+ trillion in 2020, China OFDI has the potential to grow more than six-fold to reach USD $3 trillion by the end of this decade!
As reflected in numerous reports (including one soon to be published by GWC) The U.S. has historically been the recipient of 17% of worldwide FDI. China OFDI in the U.S. is gaining momentum and we believe it will represent one of the great growth sectors of the next decade.
The development and deployment of renewable energy and clean technology has been made a national priority under China’s 12th Five-Year Plan. The U.S. is home to a significant percentage of the world’s renewable energy and clean tech companies, many of which possess industry-leading technologies. Additionally, renewable energy projects have been the favored target of worldwide OFDI earmarked for greenfield projects. The U.S. has been the #1 recipient in the world of OFDI focused on this sector.
All these factors indicate that the U.S. renewable energy and clean technology industries should be a major beneficiary of investment and M&A opportunities spurred by China’s OFDI.
GWC is prepared to assist Chinese companies and investors seeking opportunities in the U.S. renewable energy and clean tech market, and U.S. companies and investors seeking to raise capital from or sell companies to industry stakeholders in China.