EIU - China Going Global Investment Index - 2023

China Going Global
Investment Index 2023

The Belt and Road Initiative’s second decade
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CHINA GOING GLOBAL INVESTMENT INDEX 2023
THE BELT AND ROAD INITIATIVE’S SECOND DECADE
Contents
1. Introducing the China Going Global Investment Index 3
2. 2023 main ranking and key findings 4
3. 2023 sub-rankings 7
Market expansion: the next billion consumers in Asia and Africa 7
India: the market that keeps China at arm’s length 8
Supply-chain development: capturing friend-shoring and near-shoring trends 9
Which South-east Asian country is for you? Identifying the strengths and weaknesses
of each 10
Natural resources: why Central Asia stands out, and why African countries
vary in their appeal 12
Technology and innovation: focusing on non-critical IP in the West 14
4. Balancing opportunities and risks 15
Appendix 1: methodology notes 17
Appendix 2: full ranking 19
Appendix 3: full list of indicators 21
1 © The Economist Intelligence Unit Limited 2023

• The China Going Global Investment Index demonstrates the quantifiable aspects
of overseas investment strategy decisions and a systematic approach to identifying
opportunities and risks, leveraging EIU’s economic forecasts and forward-looking
risk-assessment metrics. Companies can, in turn, tailor the rankings to their particular
investment objectives.
• The 2023 edition of the Index ranks 80 investment destinations based on their appeal to
Chinese investors. Many emerging markets have grown more attractive to such investors
over the last decade, because of their natural resources, market size and/or pivotal role in
the global supply chain. Outside Asia, we have identified several Latin American, Middle
Eastern and African markets with strong potential.
• The risk tolerance of Chinese investors has declined, and the rankings for countries like Iran,
Myanmar and the Czech Republic are therefore low. Chinese investors can use the Index to
help them avoid countries with high levels of operational, financial and sanctions risk, as
well as those with cooling political relations with China.

1. Introducing the China Going Global

Investment Index
The Chinese president, Xi Jinping, launched the Belt and Road Initiative (BRI) in 2013, and
in the decade since, Chinese companies have become formidable global investors. The flow
of overseas direct investment (ODI) is set to grow further in the coming decade, after enthusiasm
waned briefly in recent years because of the Chinese government’s call for less speculative investment,
souring relations with key destination markets and the impact of the coronavirus pandemic. In the
current geopolitical context, overseas expansion has gained importance. It enables Chinese firms to
navigate trade restrictions and to secure essential materials and technologies, and China to strengthen
its relations with other countries (particularly those outside the West).
We forecast that China will regain its position as the second-largest source of ODI by 2024.
The increase in Chinese ODI will probably mirror the trajectory observed previously in more developed
economies, as China’s income and technological capabilities advance and the domestic market
matures. However, China’s ODI flows will remain small relative to its economic weight (and those of
the US).
EIU has long supported companies and investors aiming to expand beyond their home
markets and go global. We developed the China Going Global Investment Index in 2013 to
demonstrate to investors the quantifiable aspects of ODI strategy decisions and a systematic
approach to identifying opportunities and risks. Leveraging our economic forecasts and forward-
looking risk-assessment metrics, the Index scores and ranks economies based on the opportunities
they present to Chinese companies, and the potential risks tied to bilateral relations and the business
environment. Companies can, in turn, tailor the ranking to their particular investment objectives using
the same dataset.
How EIU evaluates the appeal of different investment destinations to Chinese investors
Market expansion Bilateral Market expansion Bilateral relations
(17%) relations with (22%) with China (30%)
China (17%)
Supply-chain Opportunity
development (50%) Risk
(17%) 2023 (50%)
Risk
Opportunity 2013 (33%)
Supply-chain
(67%) development
(16%) EIU Operational
Risk (12.5%)
Natural resources Natural resources
(18%) EIU (7%)
Operational EIU Financial
Technology & Risk (16%) Technology & Risk (7.5%)
innovation (15%) innovation (5%)
Source: EIU.

The 2023 edition of the Index ranks 80 investment destinations based on their appeal to
Chinese investors, using around 200 indicators. We have incorporated new markets that are
gaining attention from Chinese investors, such as Bolivia and Uzbekistan. We have given a higher
weighting to risks, particularly those associated with geopolitics, which reflects the increasingly risk-
averse approach to investment decisions. The mix of indicators chosen has also evolved over the past
decade. Methodology notes, a full ranking and a full list of indicators can be found in the appendices.
2. 2023 main ranking and key findings

Singapore tops the ranking as the most attractive destination
Investment 2023 2013 2013-23 for Chinese investors. Its appeal lies in its status as an
destination Rank Rank Change established global business hub, its cultural ties to China and
Singapore 1 2 ▲ its neutrality in the tensions between China and the West. All
Indonesia 2 44 ▲ of these factors suggest lower operational risks for Chinese
companies and investors, who often encounter restrictions in
Malaysia 3 18 ▲
other countries. In addition, the affluent city state serves as a
Hong Kong 4 3 ▼
headquarters for Chinese firms looking to tap into the rapidly
Thailand 5 35 ▲ growing market of South-east Asia. Its acclaimed technological
Vietnam 6 41 ▲ expertise also offers research-and-development opportunities.
Switzerland 7 7 — Altogether these factors render Hong Kong (ranked 4th)—a
special administrative region of China and another business hub
UAE 8 11 ▲
in Asia—less attractive in comparison. However, we highlight
Saudi Arabia 9 15 ▲
the emergence of policy uncertainties as Singapore places more
Chile 10 22 ▲ emphasis on social inclusion, such as an increased focus on
India 11 33 ▲ wealth taxation and wage increases for low-income workers,
Bangladesh 12 52 ▲ which could disproportionately affect certain industries.
South Africa 13 49 ▲
South-east and South Asia have climbed steadily in our
New Zealand 14 17 ▲ ranking since 2013, reflecting the regions’ robust growth
Russia 15 9 ▼ outlook, growing middle class, abundant strategic natural
Qatar 16 24 ▲ resources and relative openness towards Chinese investors.
Egypt 17 51 ▲ As export hubs, many countries maintain strong supply-
chain ties with upstream Chinese suppliers, while benefiting
Colombia 18 50 ▲
from reduced tariffs in key export markets downstream.
Kazakhstan 19 38 ▲
The attractiveness of Indonesia (2nd) stems from its nickel
South Korea 20 28 ▲ reserves, abundant cheap labour and vast market size, while
Malaysia (3rd) and Thailand (5th) are enticing because of
their relatively established infrastructure and complementary
supply chains. The appeal of India (11th), which theoretically
offers significant opportunities, is hampered by strained
bilateral relations.

Investment 2023 2013 2013-23

destination Rank Rank Change
The rising ranking of many emerging markets can be
Cambodia 21 N/A —
attributed to their strong ties with China, natural resources,
Mexico 22 30 ▲ market size and/or their pivotal role in the global supply chain.
Israel 23 31 ▲ China’s import diversification strategy dictates that it will
Ecuador 24 64 ▲ not rely on a single market for commodity supply, and a wide
Peru 25 42 ▲ range of well-endowed countries are therefore present, from
Latin American countries such as Chile (10th) to Middle
Germany 26 10 ▼
Eastern markets such as Qatar (16th). Mexico (22nd) is
Brazil 27 26 ▼
notable for supply-chain opportunities tied to market access
US 28 1 ▼ in North America. However, its geographical distance and
Austria 29 25 ▼ less friendly bilateral relations, especially in comparison with
France 30 20 ▼ Asian economies, have prevented a further rise in the ranking.
Conversely, Turkey (72nd) has lost its allure for Chinese
Sweden 31 13 ▼
investors because of an unpredictable foreign and economic
Australia 32 5 ▼
policy landscape.
Morocco 33 60 ▲
Mongolia 34 N/A —
Philippines 35 39 ▲
Japan 36 4 ▼ The ranking of many advanced markets, including the US
Ireland 37 N/A — (28th), Japan (36th), Canada (55th) and the UK (60th),
has plunged. Their deteriorating relations with China and
Algeria 38 61 ▲
the subsequent screening of inbound investment present
Denmark 39 14 ▼
significant hurdles for Chinese investors. Investment from
Serbia 40 N/A — China in sensitive sectors such as advanced manufacturing
Pakistan 41 47 ▲ and telecommunications now faces heightened scrutiny.
Tanzania 42 N/A — Nonetheless, their unmatched market size, high income
Iran 43 57 ▲ levels, stable operational environments and prowess in
technology and innovation have ensured that they remain
Azerbaijan 44 59 ▲
attractive to investors in non-sensitive sectors. In this
Norway 45 8 ▼
context, Switzerland (7th) and New Zealand (14th)
Papua New Guinea 46 N/A — distinguish themselves by remaining in the ranking’s top 20.
Finland 47 16 ▼
Netherlands 48 21 ▼
Slovakia 49 N/A —
Uzbekistan 50 N/A —

Investment 2023 2013 2013-23

destination Rank Rank Change
Turkmenistan 51 N/A — Risk considerations are very evident in the 2023 rankings.
Spain 52 29 ▼ The rankings for Russia (15th) and Iran (43rd) have
Angola 53 67 ▲ declined or stayed low as Chinese investors seek to avoid
the potential for secondary sanctions. Despite this, Russia
Dominican Republic 54 55 ▲
remains in the top 20 because of its resource endowment
Canada 55 6 ▼
and market size, particularly with the withdrawal of
Nigeria 56 66 ▲ Western companies leaving market gaps in sanctions-free
Portugal 57 40 ▼ sectors. Central and Eastern European countries like
Ethiopia 58 N/A — Poland (61st) have become less receptive to Chinese
Hungary 59 N/A — investment, especially after Russia’s invasion of Ukraine
reignited concerns over European security. Many Central
UK 60 19 ▼
Asian countries rank lower than other emerging markets,
Poland 61 36 ▼
given their less open markets and political volatility. Taiwan
Sri Lanka 62 46 ▼ (75th) experienced the steepest drop in ranking, as cross-
Zambia 63 N/A — Strait relations have deteriorated to one of their lowest
Czech Republic 64 N/A — points in recent decades. Controls on inbound Chinese
investment have tightened considerably.
Italy 65 34 ▼
Bolivia 66 N/A —
Congo (DR) 67 N/A —
Kenya 68 65 ▼
Myanmar 69 N/A —
Argentina 70 62 ▼
Belgium 71 23 ▼ Markets ranked at the bottom often face extreme
Turkey 72 53 ▼ challenges in their business environment, because of
Bulgaria 73 N/A — regional conflicts, local political upheaval and/or economic
Romania 74 N/A — collapse. For instance, hydrocarbon and agricultural
commodity investment opportunities in Ukraine (80th,
Taiwan 75 12 ▼
bottom), Venezuela (79th), and Myanmar (69th) have
Congo (Brazzaville) 76 N/A —
been severely constrained by recent political and security
Greece 77 56 ▼ crises. In the Democratic Republic of Congo (67th),
Iraq 78 N/A — the presidential election in 2023 serves as a flashpoint for
Venezuela 79 58 ▼ instability.
Ukraine 80 N/A —

3. 2023 sub-rankings
We also provide sub-index rankings tailored to specific investor interests. By fine-tuning

indicator portfolios and adjusting their opportunity and risk weightings, we have identified the top 20
destinations for investors across various motivations. Methodology notes for these sub-rankings can be
found in Appendix 1.
Market expansion: the next billion consumers in Asia and Africa

We anticipate strong momentum behind
Chinese enterprises going global, with Most attractive destinations for market
expansion investment
expansion set to be particularly evident in
Rank Destination
consumer electronics, information technology
1 Indonesia
services (eg data centres, e-commerce and
2 Bangladesh
gaming), telecommunications, renewable 3 Vietnam
energy and automotive products, where China 4 Malaysia
has already been establishing its competitive 5 Pakistan
edge. Seeking external markets has long been 6 Cambodia
China’s ODI goal, but deteriorating relations with 7 Egypt
conventional export markets and slow domestic 8 India
growth have highlighted the urgency of finding 9 Tanzania
alternative markets. 10 Colombia
EIU nonetheless highlights risks 11 Russia
associated with market entry, ranging from 12 Ethiopia
local government policies towards imports 13 US

14 Angola
and investment to public opinion on China
15 Philippines
and Chinese products. Retail networks and
16 Nigeria
infrastructure, taxation policies and the ease of
17 Israel
profit repatriation are also prominent risks.
18 Brazil
Market expansion opportunities are more
19 Congo (DR)
prevalent in South-east and South Asia. We
20 Kenya
forecast that Indonesia and Bangladesh will
be among the top 20 global economies by 2040,
based on market size, economic growth and the potential of the aforementioned sectors. Favourable
industrial policies will also encourage firms to consider these markets as export bases. For example,
though not listed in the top 20, Thailand’s combination of supply- and demand-side incentives
for electric vehicles (EVs) is attracting Chinese automakers to position the country as their EV
manufacturing hub in the Association of South-East Asian Nations (ASEAN).
Africa’s market potential will be more pronounced in the late 2020s, with income and
economic resilience continuing to improve and the African Continental Free-Trade Area (AfCFTA)

gradually taking shape. Transport and logistics services remain a key weakness in plans to develop
better-connected regional markets, but—together with infrastructure development—they are sectors
with high potential.
Colombia stands out as one of the few Latin American countries in the top-ranked economies,
as a result of the aggressive green transition policy promoted by the president, Gustavo Petro.
However, Mr Petro’s weak position in the legislature points to the risk that none of his major reforms
will be passed before his term ends in August 2026. Changes in government could result in policy
discontinuity in the future.
manufacturing supply chain, but the government’s

India: the market that keeps China at
incentives to promote manufacturing in India will
arm’s length
be made available to Chinese players only on a
very limited basis. Merely forming joint ventures
India—the most populous country in the world
( JVs) with Indian companies will not ensure the
and forecast by EIU to be one of the fastest-
circumvention of protectionist tendencies, and
growing economies in the 2020s—is the only
subsidies granted to Indian-Chinese JVs will be
single market that offers a potential scale
assessed on a case-by-case basis. Regulatory probes
comparable to that of China. Moreover, India relies
targeting Chinese companies (such as two consumer
on China for key inputs, including electronics and
electronics brands, Xiaomi and Oppo) will continue
solar panel components, presenting a window of
intermittently, whether based on allegations of tax
opportunity for Chinese investors.
evasion, foreign-exchange violations or other legal
However, we expect India’s investment
issues.
environment to become increasingly
challenging for Chinese companies and
India's working-age population will grow
investors. Corruption and bureaucratic hurdles,
significantly over this decade
protectionist attitudes, challenges in land acquisition (change in working-age population between
and other operational risks have long posed 2020 and 2030, m)
difficulties for foreign companies, regardless of their
origin. The strained relations between India and
China, which we forecast will characterise bilateral
Mainland China
-40.2
interaction for the rest of the decade, introduce
added geopolitical risks.
India’s emphasis on self-reliance and its India
113.5 Thailand
implicit competition with China point to a (-3.3)
Vietnam
hostile environment for Chinese investment. (2.8) 12.5 Philippines
Amid India’s continuing reliance on Chinese- Sri Lanka
manufactured goods and components, the (0.2) Malaysia
(2.2)
country will aim to localise as much manufacturing
18.2 Indonesia
activity as possible. The South Asian giant is well
Source: EIU.
placed to benefit from geopolitical and economic
trends that are driving the diversification of Asia’s

Supply-chain development: capturing friend-shoring and near-shoring trends

The sub-ranking for Supply-chain
development assesses the competitiveness Most attractive destinations for Supply-
chain development investment
of different investment destinations as key
Rank Destination
supply-chain nodes of Chinese manufacturers.
1 Singapore
However, we suggest that investors consider 2 Malaysia
the key operational risks associated with the 3 Thailand
investment destination, such as labour market 4 Indonesia
restrictions and disputes with major trading 5 Vietnam
partners. Financial risks, such as exchange-rate 6 Mexico
volatility and capital account convertibility, are 7 Egypt
also instrumental. 8 Bangladesh
Beyond the natural “winners” of South-east 9 Morocco
and South Asia, several Latin American and 10 Cambodia
Eastern European countries stand out because 11 South Africa
of their integration with North American 12 Chile

13 Philippines
and EU markets. Chinese manufacturers in
14 India
Mexico enjoy tariff-free exports to the US via
15 Hungary
the US-Mexico-Canada Agreement (USMCA).
16 Brazil
Nonetheless, the long-term risk of the US
17 Poland
restricting imports from Chinese firms operating
18 Bulgaria
in Mexico could point to more opportunities in
19 Romania
other Latin American countries, such as Chile, 20 Turkey
which has strong resource endowment and a free-
trade agreement with the US.
North Africa and Turkey (alongside the Balkans, though not listed in the top 20) are up-and-
coming regions that could fill some of the gaps in low-value manufacturing, along with supply-
chain activities such as warehousing and logistics. Egypt has a diverse industrial foundation and a
focus on renewable energy which, combined with the strategic location of the Suez Canal, underscore
its potential as a green hydrogen logistics hub. However, the government’s slow progress in rolling
out hydrogen policies will lead to investment delays. The Balkans and Turkey, strategically situated
between Europe and the Middle East, also maintain relatively low labour and regulatory burdens
compared to the rest of Eastern Europe. However, Turkey’s economic outlook is hampered by soaring
inflation, exchange-rate issues and potential capital controls.

Manufacturers are moving to Mexico's border states, driving up real-estate demand

(% of of industrial space absorption of 2021)
Ciudad Juárez,
Chihuahua UNITED STATES
17%
Coahuila
20%
Tijuana, Baja
California Monterrey,
8% Nuevo León
45%
M EXICO
Aguascalientes,
Aguascalientes
2%
Toluca,
State of Mexico
40-50% Guadalajara, 2%
30-40% Jalisco
1%
20-30%
10-20% Guanajuato, BELIZE
Guanajuato
0-10%
4% GUATEMALA
Sources: Grupo Bursátil Mexicano (GBM), using data from CBRE; EIU.
Still, the Philippines’ restrictive labour regulations

Which South-east Asian country is
could result in increased labour costs and greater
for you? Identifying the strengths
and weaknesses of each incentives for firms to remain informal. Conversely,
security risk is relatively high in the Philippines,
against the backdrop of significant drugs trade.
When comparing various investment
Ties with China are likely to deteriorate, with the
destinations with similar rankings, a detailed
Philippines leaning closer to the US under the
breakdown of risks is necessary. For instance,
current president, Ferdinand “Bongbong” Marcos Jr.
for companies looking to establish manufacturing
Continual monitoring of risks will be
plants in South-east Asia, both Vietnam and the
necessary for those who already have a
Philippines are appealing options because of their
significant presence in a given economy. In
low labour costs. However, their risk profiles differ.
particular, risk scenario planning accelerates
Vietnam has significantly higher labour market
response at the business level when emergencies
risks compared to the Philippines, due to the
do occur.
former’s rising wages and lack of skilled labour.

Comparing operational risk in Vietnam and the Philippines

(EIU Operational Risk score, 100=high risk)
Vietnam Philippines Financial
70
Tax policy 60 Foreign trade & payments
50
40
30
Security Government effectiveness
20
10
Political stability Infrastructure
Macroeconomic Labour market
Note. As at Q1 2023. Legal & regulatory

Source: EIU Operational Risk.
Top five risk scenarios for businesses operating in Vietnam

Risk scenario Risk category Probability Impact Intensity
The government drastically increases rules-of-origin Foreign trade & High High 16
enforcement actions payments
Vietnam is hit by El Niño weather conditions Macroeconomic Very high Moderate 15
A major domestic bank fails, forcing the government to Financial Moderate High 12
provide assistance
Plans to expand the capacity of ports and airports suffer Infrastructure High Moderate 12
multi-year delays
Territorial disputes in the South China Sea lead to an Security Low Very high 10
outbreak of hostilities
Intensity colour key: 1-4 5-8 9-12 13-16 17-25
Note. Intensity is a product of the probability and impact ratings, where “Very low” scores 1 and “Very high” scores 5.
Source: EIU Operational Risk.

Natural resources: why Central Asia stands out, and why African countries
vary in their appeal
China’s interest in natural resource
investments has evolved to become more Most attractive destinations for natural
systemic. The strategy to diversify imports has resources investment
Rank Destination
become increasingly evident, as has competition
1 Indonesia
for mine exploitation and pricing rights. Priorities
2 Australia
have shifted, with agricultural commodities and
3 Saudi Arabia
strategic minerals like lithium, cobalt and nickel
4 UAE
now taking precedence over coal.
5 Qatar
For long-term mining projects, EIU 6 Brazil
advises companies to monitor closely risks 7 Chile
related to political instability, regulatory 8 Kazakhstan
uncertainty, environmental protection 9 Vietnam
policies, infrastructure deficiencies and 10 Iran
foreign reserve coverage for capital 11 Russia
goods imports. The emergence of resource 12 Canada
nationalism can take various forms, including 13 India
escalated taxation, changing licensing and equity 14 Philippines
requirements and the imposition of export 15 Turkmenistan
restrictions. Bilateral relations are increasingly 16 US

17 Argentina
influential, with countries such as Canada limiting
18 Nigeria
Chinese investments. High-profile projects are
19 Congo (DR)
also vulnerable to the whims of the election
20 Iraq
cycle, during which concerns about resource
exploitation and “debt-trap” narratives might arise.
Beyond the obvious choices of oil- and gas-rich Gulf countries, strong bilateral ties and
geopolitical proximity have rendered Kazakhstan and Turkmenistan attractive to Chinese
investors. Only a few African countries rank among the top 20 investment destinations, largely
because of the aforementioned operational risks in many African countries. In addition, while
China has expanded its reach across the continent’s mining sector, it still plays a minor role compared
to regional giants and Western-aligned multinational mining companies, with incumbents likely to
retain a dominant position.

Monitoring the 2023-24 election cycle in Africa
Morocco Tunisia
Algeria
Libya Egypt
Cabo Verde Mauritania

Senegal Mali Niger
The Gambia Sudan Eritrea
Chad
Guinea- Burkina Faso Djibouti
Guinea
Bissau
Sierra Leone Nigeria Central Ethiopia
South
Liberia
Cameroon African Sudan Somalia
Côte d’Ivoire Republic
Ghana Rwanda Uganda
Kenya
Togo Gabon Democratic
Benin Republic
São Tomé & Príncipe Seychelles
of Congo Tanzania
Equatorial Guinea Burundi
Congo (Brazzaville) Comoros
Angola Malawi
Zambia
Election for head of state and/or Zimbabwe Madagascar
national legislature in ... Namibia Botswana
Mozambique
2023 2024
Eswatini Mauritius
South Lesotho
Africa
Source: EIU.
Mapping Chinese mineral investment in Africa

(2021)
Morocco Tunisia
Algeria
Cabo Verde Mauritania

Fe Mali
Senegal Li Niger
Sudan Eritrea
The Gambia U Chad Cu Zn Au Ag
Au
Guinea- Guinea Burkina Faso Au
Bissau Bx Fe Nigeria Ethiopia Djibouti
Sierra Leone Côte Li
Fe Au Liberia d’Ivoire Central South Au Fe
Cameroon African Sudan
Fe Au Mn
Ghana Benin Fe Au Somalia
Democratic
Bx Au Togo Mn Fe Au Gabon Kenya Uganda Au
Republic
Fe
Congo (Brazzaville) of Congo Seychelles
Cu Co Ct Au Tanzania Rwanda
Major mineral locations Malawi
Angola
Bx Bauxite Li Lithium Zambia Comoros
Dd Cu Co
Cl Coal Mn Manganese
Co Cobalt Ni Nickel Zimbabwe Madagascar
Ct Coltan/TantalumPt Platinum Namibia Li Ni Dd Au
Cu Copper Ag Silver Li U Botswana Mozambique
Dd Diamond Ti Titanium C Ti Cl
Mauritius
Au Gold U Uranium South
LesothoDd
C Graphite Zn Zinc Africa
Au Cu Bx Pt
Fe Iron ore
Countries in receipt of
Chinese investment
Source: EIU.

Technology and innovation: focusing on non-critical IP in the West

Technology acquisition used to be a key
reason for Chinese companies to go global, Most attractive destinations for technology
but it now constitutes a small share of ODI, and innovation investment
Rank Destination
as technological competition with the West
1 Singapore
intensifies. Although this sub-ranking is aimed
2 South Korea
at identifying markets with strong innovation
3 Switzerland
capacity, acquisitions have become exceedingly 4 Germany
challenging. We nonetheless retain the ranking 5 Israel
to assist investors in non-sensitive industries in 6 Japan
finding investment destinations. For example, 7 Austria
Chinese game developers such as Tencent and 8 Sweden
Netease have maintained their investment 9 France
activity in gaming studios in Europe, Japan and 10 Denmark
South Korea. For European countries, we 11 Netherlands
advise investors to assess their investment risks 12 Finland
based on the implementation of EU regulations 13 US
on investment screening, and those on foreign 14 United Kingdom

15 Norway
subsidies in merger-and-acquisition deals.
16 Italy
17 Belgium
18 Australia
19 Spain
20 Canada

4. Balancing opportunities and risks
The mixed record of Chinese ODI over the last decade underscores the importance of
anticipating the risks associated with entering a foreign country. The Chinese government has
increasingly emphasised the “rationalisation” of overseas investment; the prioritisation of “small and
beautiful” projects in the BRI is part of this drive. In our monitoring of Chinese ODI trends, we have
recognised that risk tolerance has declined among many Chinese investors.
Recognising different levels of risk tolerance and management capacity among investors,
we have supplemented the ranking with an opportunity/risk matrix—a tool designed to
categorise markets into various groups. The matrix does not aim to indoctrinate one set of
investment guidelines, nor does it intend to provide sets of white or black lists. Instead, all shortlisted
Destinations with High risk Destinations with

few opportunities and high risk more opportunities but high risk
Ukraine Taiwan
Venezuela
United States
Greece
Iraq BG TR
RO Congo (DR)
BE KE Canada
Congo (Brazzaville) GB
MM PL
CZ HU IR India
IT ET NG
Argentina BO Philippines
ES UZ IE
PT DO Brazil
Zambia TM PK Russia
Few FI JP
AO AZ South Korea
opportunities NL AU
SK NO DZ
PG TZ Germany
Sri Lanka MA Mexico More
YG DK FR IL opportunities
MN SE KZ EG KH
AT CO Bangladesh
QA Vietnam
Ecuador PE
ZA Saudi Arabia
New Zealand UAE Switzerland
Indonesia
Chile
Thailand
Malaysia
Destinations with Hong Kong Destinations with

Singapore
less risk but few opportunities more opportunities and less risk
Low risk

economies are popular destinations for Chinese investment, and the matrix aims to indicate their
relative opportunities and risks, as well as the possibility of leveraging EIU forecasts and ratings to
evaluate market appeal quantitatively and to forecast the opportunities and risks that lie ahead.
Destinations with more Destinations with less risk Destinations with more Destinations with few
opportunities and less risk but few opportunities opportunities but high risk opportunities and high risk
BD Bangladesh AT Austria DZ Algeria AO Angola
KH Cambodia CL Chile AU Australia AR Argentina
CO Colombia DK Denmark BR Brazil AZ Azerbaijan
EG Egypt EC Ecuador BG Bulgaria BE Belgium
FR France HK Hong Kong CA Canada BO Bolivia
DE Germany MN Mongolia CD Congo (DR) CG Congo (Brazzaville)
ID Indonesia NZ New Zealand ET Ethiopia CZ Czech Republic
IL Israel PG Papua New Guinea HU Hungary DO Dominican Republic
KZ Kazakhstan PE Peru IN India FI Finland
MY Malaysia YG Serbia IR Iran GR Greece
MX Mexico TZ Tanzania IE Ireland IQ Iraq
MA Morocco JP Japan IT Italy
QA Qatar NG Nigeria KE Kenya
SA Saudi Arabia PK Pakistan MM Myanmar
SG Singapore PH Philippines NL Netherlands
ZA South Africa PL Poland NO Norway
SE Sweden RU Russia PT Portugal
CH Switzerland KR South Korea RO Romania
TH Thailand ES Spain SK Slovakia
AE UAE TW Taiwan LK Sri Lanka
VN Vietnam TR Turkey UA Ukraine
TM Turkmenistan VE Venezuela
GB UK ZM Zambia
US US
UZ Uzbekistan

Appendix 1: methodology notes

Main ranking
The decision on what opportunities and risks to include under the two pillars of opportunity
and risk is based on factors that Chinese firms and EIU identify as crucial in their decision-
making process. We have pinpointed four motivations for which Chinese companies “go global”:
market expansion, supply-chain development, natural resources and technology and innovation. The
risk considerations include a country’s bilateral relations with China and the operational and financial
risks to general foreign investors. The latter two are based respectively on our Operational Risk and
Financial Risk ratings.
Within these categories of opportunity and risk, we have selected a series of around 200
forward-looking quantitative indicators. The full list can be found in Appendix 3. All indicators are
compiled into category scores and ranking. They are then aggregated to form scores for each of the
two pillars (opportunity and risk).
Finally, these pillar scores are combined to generate the overall China Going Global Investment
Index score for each investment destination. The ranking is based on the scores, in descending order.
When solely considering investment However, Hong Kong is less risky for Indonesia ranks highly in our ranking
opportunities, the US, Indonesia Chinese investors. Indonesia presents because of its good balance of
and Russia are appealing to Chinese moderate operational and financial opportunities and risks. Risk considerations
companies. Hong Kong, on the risks, but its ties with China are solid. have made the US and Russia less
other hand, does not offer many Russia is under Western sanctions, attractive to Chinese companies and
opportunities. while the US has a fraught relationship investors. Hong Kong ranks highly, largely
with China. because it is a low-risk market.
Destinations with Destinations A balanced

Rank Rank Rank
most opportunities that are least risky approach
1 India 1 Singapore 1 Singapore
2 US 2 Hong Kong 2 Indonesia
3 Indonesia 3 Malaysia 3 Malaysia
4 Russia 4 Thailand 4 Hong Kong
5 Vietnam 5 Chile 5 Thailand
6 South Korea 6 Indonesia 6 Vietnam
7 Philippines 7 Switzerland 7 Switzerland
8 Bangladesh 8 New Zealand 8 UAE
9 Brazil 9 UAE 9 Saudi Arabia
10 Taiwan 10 South Africa 10 Chile
˸ ˸ ˸
15 Russia
˸ ˸
28 US
˸
45 Russia
˸
68 Hong Kong
˸
77 US
˸
Sub-rankings
We have singled out the top 20 investment destinations under each of the four motivations:
market expansion, supply-chain extension, natural resources exploration and technology
acquisition. We first selected winners that ranked the highest by opportunities, and then re-ranked
the 20 economies, factoring in risk factors such as sanctions, conflicts and exchange-rate volatility.
Using the natural resources ranking as an example, Russia and Australia offer the most natural
resources investment opportunities for Chinese companies and investors, but their ranking drops after
operational and bilateral relation risks are taken into consideration.
Top 20 destinations with the most Re-ranked after factoring in

Rank Rank
natural resources opportunities their risk ranking
1 Russia 1 Indonesia
2 Australia 2 Australia
3 Brazil 3 Saudi Arabia
4 Iran 4 UAE
5 Indonesia 5 Qatar
6 Canada 6 Brazil
7 Qatar 7 Chile
8 Saudi Arabia 8 Kazakhstan
9 Congo (DR) 9 Vietnam
10 US 10 Iran
11 India 11 Russia
12 Vietnam 12 Canada
13 Turkmenistan 13 India
14 Iraq 14 Philippines
15 UAE 15 Turkmenistan
16 Argentina 16 US
17 Kazakhstan 17 Argentina
18 Philippines 18 Nigeria
19 Nigeria 19 Congo (DR)
20 Chile 20 Iraq

Appendix 2: full ranking

Investment 2023 2013 2023 Opportunity 2023 Risk
destination Rank Rank Rank Rank*
Singapore 1 2 19 1
Indonesia 2 44 3 6
Malaysia 3 18 11 3
Hong Kong 4 3 68 2
Thailand 5 35 17 4
Vietnam 6 41 5 14
Switzerland 7 7 25 7
UAE 8 11 28 9
Saudi Arabia 9 15 27 11
Chile 10 22 65 5
India 11 33 1 63
Bangladesh 12 52 8 18
South Africa 13 49 46 10
New Zealand 14 17 63 8
Russia 15 9 4 45
Qatar 16 24 33 15
Egypt 17 51 24 19
Colombia 18 50 35 17
Kazakhstan 19 38 29 20
South Korea 20 28 6 42
Cambodia 21 N/A 21 22
Mexico 22 30 22 24
Israel 23 31 20 25
Ecuador 24 64 73 12
Peru 25 42 48 13
Germany 26 10 14 32
Brazil 27 26 9 43
US 28 1 2 77
Austria 29 25 62 16
France 30 20 34 29
Sweden 31 13 43 23
Australia 32 5 18 36
Morocco 33 60 38 26
Mongolia 34 N/A 56 21
Philippines 35 39 7 57
Japan 36 4 12 50
Ireland 37 N/A 15 48
Algeria 38 61 26 39
Denmark 39 14 59 27
Serbia 40 N/A 60 28

Investment 2023 2013 2023 Opportunity 2023 Risk

destination Rank Rank Rank Rank*
Pakistan 41 47 23 47
Tanzania 42 N/A 64 30
Iran 43 57 13 60
Azerbaijan 44 59 50 38
Norway 45 8 57 35
Papua New Guinea 46 N/A 74 31
Finland 47 16 52 40
Netherlands 48 21 61 37
Slovakia 49 N/A 72 34
Uzbekistan 50 N/A 36 52
Turkmenistan 51 N/A 42 51
Spain 52 29 41 53
Angola 53 67 71 41
Dominican Republic 54 55 54 46
Canada 55 6 16 70
Nigeria 56 66 40 56
Portugal 57 40 69 49
Ethiopia 58 N/A 45 59
Hungary 59 N/A 44 62
UK 60 19 30 66
Poland 61 36 39 64
Sri Lanka 62 46 80 33
Zambia 63 N/A 76 44
Czech Republic 64 N/A 58 61
Italy 65 34 67 58
Bolivia 66 N/A 70 55
Congo (DR) 67 N/A 31 71
Kenya 68 65 47 67
Myanmar 69 N/A 55 65
Argentina 70 62 78 54
Belgium 71 23 49 68
Turkey 72 53 32 74
Bulgaria 73 N/A 37 75
Romania 74 N/A 51 72
Taiwan 75 12 10 80
Congo (Brazzaville) 76 N/A 79 69
Greece 77 56 53 76
Iraq 78 N/A 75 73
Venezuela 79 58 66 78
Ukraine 80 N/A 77 79
* The higher the risk ranking, the lower the risk.

Appendix 3: full list of indicators

Opportunity
Category Sub-category Indicators Primary source Reference period
Market size & EIU forecast or
Market expansion Real GDP (% change, year on year) 2023-27
growth estimates
Private consumption (% real change, year EIU forecast or
2023-27
on year) estimates
Gross fixed investment (% real change, year EIU forecast or
2023-27
on year) estimates
EIU forecast or
Nominal GDP 2023-27
estimates
EIU forecast or
Total population 2023
estimates
EIU forecast or
Population (% change, year on year) 2023-27
estimates
EIU forecast or
Personal disposable income (per head) 2023
estimates
Personal disposable income (% real change, EIU forecast or
2023-27
year on year) estimates
Mobile broadband subscriptions (% change, EIU forecast or
Targeted industry 2019-25*
IT services spending (US$; % change, year EIU forecast or
2019-25*
on year) estimates
Healthcare expenditure (US$; % change, EIU forecast or
2019-25*
Solar/wind/other alternative energy EIU forecast or
2019-25*
consumption (% change, year on year) estimates
Gross electricity consumption (% change, EIU forecast or
2019-25*
New passenger car registration (% change, EIU forecast or
2019-25*
New commerical vehicle registration (% EIU forecast or
2019-25*
change, year on year) estimates
New electric vehicle registration (% change, EIU forecast or
2023-27
Natural resources Food & grains Arable land (per head) FAO 2020
Net food exports FAO 2021
Fossil fuel Proven coal reserves EIA 2021
Proven natural gas reserves EIA 2021
Proven oil reserves EIA 2021
Industrial metals Copper (reserves) USGS 2022

Opportunity
Iron ore (reserves) USGS 2022
Lthium (identified resources) USGS 2022
Cobalt (reserves) USGS 2022
Nickel (reserves) USGS 2022
Rare-earth (reserves) USGS 2022
Technology & R&D researchers (full-time equivalent; per

Innovation input UNESCO Latest available
innovation million)
Gross domestic expenditure on R&D (% of
UNESCO Latest available
GDP)
School life expectancy (primary to tertiary
World Bank 2021
education)
Innovation output Relative knowledge intensity of the economy OEC 2021
Patent applications (domestic and abroad) WIPO 2019-21
H-index SCImago 2022
Number of brands in top 500 Brand Finance 2023
Supply-chain Industrial
Manufacturing as % of GDP World Bank Latest available
development readiness
EIU forecast or
FDI inflows as % of GDP 2023-27
estimates
EIU forecast or
FDI inflows total 2023-27
estimates
EIU forecast or
Input cost Labour cost 2023
estimates
Global petrol
Business electricity prices September 2022
prices
Labour Linear regression between overall unit labour EIU forecast or
2023-27
environment cost growth and nominal GDP growth estimates
Working age population EIU estimates 2021
Working age population (% of total) EIU estimates 2021
Infrastructure risk score (including power,

port and logistics, road, air and rail transport, EIU Operational
Infrastructure March 2023
telecoms and IT, cybersecurity and weather Risk
resilience)

Opportunity
Applied weighted tariff faced in major
Export opportunity WTO 2022
markets
Distance from the closest of China's largest
CEPII N/A
export markets (EU, US and Japan)
China's largest export markets (EU, US and
US, EU and Japan March 2023
Japan), or trade agreement with them
Number of anti-dumping and anti-subsidy
cases brought by large markets per US$ m WTO and IMF 2013-22
of imports
Number of regional trade agreements
WTO March 2023
notified to the WTO and in force
Risk
Bilateral relations Distance & cultural Distance from China EIU scoring; CEPII N/A
with China relations
Traveller volume EIU scoring; OAG; July 2023
FlightsFrom.com
Public perception of China EIU scoring; Pew Latest available
Ethnic Chinese population EIU scoring; Latest available

national sources
Chinese language use EIU scoring; N/A
national sources
Political & Belt and Road Initiative membership NDRC March 2023
geopolitical
relations
Membership of selected regional and EIU scoring March 2023
multilateral institutions
Alignment on international affairs at UN EIU scoring; Erik Latest available
General Assembly Voeten
Historical militarised disputes EIU scoring; Since 1949
Correlates of War
Militarised disputes EIU scoring; March 2023
Correlates of War
Membership of selected security institutions EIU scoring June 2023
Trade relations Bilateral trade with China (% of the country's EIU scoring; GAC* 2013-22
total trade)
Bilateral tade agreement in force and/or EIU scoring; March 2023
RCEP membership MofCOM
Anti-dumping and anti-subsidy cases EIU scoring; WTO 2012-22
against China per US$ m of imports from
China

Risk
WTO dispute settlement cases against EIU scoring; WTO March 2023
China
Investment Troubled investments EIU scoring; AEI 2005-22
relations and The Heritage
Foundation
Bilateral investment treaty in force EIU scoring; World March 2023
Bank
Contracted project value EIU scoring; 2013-19
MofCOM
EIU Operational & EIU Operational Political stability risk score EIU Operational March 2023
Financial Risks† Risk Risk
Security risk score EIU Operational March 2023
Risk
Government effectiveness risk score EIU Operational March 2023
Risk
Legal & regulatory risk score EIU Operational March 2023
Risk
Macroeconomic risk score EIU Operational March 2023
Risk
Foreign trade & payments risk score EIU Operational March 2023
Risk
Financial risk score EIU Operational March 2023
Risk
Tax policy risk score EIU Operational March 2023
Risk
Labour market risk score EIU Operational March 2023
Risk
Infrastructure risk score EIU Operational March 2023
Risk
EIU Financial Risk Soverign risk score EIU Financial Risk April 2023
Currency risk score EIU Financial Risk April 2023
Banking sector risk score EIU Financial Risk April 2023
Political risk score EIU Financial Risk April 2023
Economic structure risk score EIU Financial Risk April 2023
* Historical data compiled based on data from national sources and international organisations.
† The scores under EIU Operational Risk and Financial Risk are a simplified representation of 129 indicators.

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China Going Global

Investment Index 2023

Actionable insight to win in the world’s markets

Economist Intelligence Economist Intelligence Economist Intelligence

1. Introducing the China Going Global Investment Index 3

2. 2023 main ranking and key findings 4

Market expansion: the next billion consumers in Asia and Africa 7

India: the market that keeps China at arm’s length 8

Supply-chain development: capturing friend-shoring and near-shoring trends 9

Technology and innovation: focusing on non-critical IP in the West 14

4. Balancing opportunities and risks 15

Appendix 1: methodology notes 17

Appendix 2: full ranking 19

Appendix 3: full list of indicators 21

1 © The Economist Intelligence Unit Limited 2023

2 © The Economist Intelligence Unit Limited 2023

1. Introducing the China Going Global

3 © The Economist Intelligence Unit Limited 2023

2. 2023 main ranking and key findings

4 © The Economist Intelligence Unit Limited 2023

Investment 2023 2013 2013-23

5 © The Economist Intelligence Unit Limited 2023

Investment 2023 2013 2013-23

6 © The Economist Intelligence Unit Limited 2023

We also provide sub-index rankings tailored to specific investor interests. By fine-tuning

Market expansion: the next billion consumers in Asia and Africa

EIU nonetheless highlights risks 11 Russia

associated with market entry, ranging from 12 Ethiopia

local government policies towards imports 13 US

7 © The Economist Intelligence Unit Limited 2023

manufacturing supply chain, but the government’s

8 © The Economist Intelligence Unit Limited 2023

Supply-chain development: capturing friend-shoring and near-shoring trends

and South Asia, several Latin American and 10 Cambodia

Eastern European countries stand out because 11 South Africa

of their integration with North American 12 Chile

9 © The Economist Intelligence Unit Limited 2023

Manufacturers are moving to Mexico's border states, driving up real-estate demand

Still, the Philippines’ restrictive labour regulations

10 © The Economist Intelligence Unit Limited 2023

Comparing operational risk in Vietnam and the Philippines

Political stability Infrastructure

Macroeconomic Labour market

Note. As at Q1 2023. Legal & regulatory

Top five risk scenarios for businesses operating in Vietnam

Vietnam is hit by El Niño weather conditions Macroeconomic Very high Moderate 15

11 © The Economist Intelligence Unit Limited 2023

escalated taxation, changing licensing and equity 14 Philippines

requirements and the imposition of export 15 Turkmenistan

restrictions. Bilateral relations are increasingly 16 US

12 © The Economist Intelligence Unit Limited 2023

Monitoring the 2023-24 election cycle in Africa

Cabo Verde Mauritania

Mapping Chinese mineral investment in Africa

Cabo Verde Mauritania

13 © The Economist Intelligence Unit Limited 2023

Technology and innovation: focusing on non-critical IP in the West

based on the implementation of EU regulations 13 US

on investment screening, and those on foreign 14 United Kingdom

14 © The Economist Intelligence Unit Limited 2023

4. Balancing opportunities and risks

Destinations with High risk Destinations with

Destinations with Hong Kong Destinations with

1. Introducing the China Going Global Investment Index 3

2. 2023 main ranking and key findings 4

Market expansion: the next billion consumers in Asia and Africa 7

India: the market that keeps China at arm’s length 8

Supply-chain development: capturing friend-shoring and near-shoring trends 9

Technology and innovation: focusing on non-critical IP in the West 14

4. Balancing opportunities and risks 15

Appendix 1: methodology notes 17

Appendix 2: full ranking 19

Appendix 3: full list of indicators 21