Recently, China has been making efforts to increase overseas direct investment (ODI). Although this new push is still less than foreign investment into China, it is still a noticeable change in Chinese state owned firms investment preferences. In particular, Fosun International just paid $725 million for 1 chase Manhattan Plaza, Greenland invested in Atlantic yards, Soho China in the General Motors Building in Manhattan. This push to buy New York properties seems reminiscent of Mitsubishi buying the Rockefeller Centre in the 1980s. While the Japanese economy bubble burst forced Mitsubishi to sell, China hopes they will have better luck.
One major difference is how China is investing. Unlike Japan they are getting the best value for their dollar, while Mitsubishi spent far more than the asset was actually worth. Furthermore, China is taking special attention to diversify their assets. The first wave of ODI in China came in the form of state owned companies investing in energy, minerals and land in poor countries. The second wave comes from private firms seeking investments in foreign brands and technology. For example Geely bough Volvo of Sweden, Dongfeng is reportedly considering buying Peugeot-Citroen, Alibaba is opening a division in America to invest in internet start-ups, and Lenovo is working on a bid for BlackBerry.
Overall, this change in investment has shot up the share of Chinese ODI has increase from one tenth in 2002 to two thirds in 2012. Hopefully China will not see the same failure that Japan found in New York, but it certainly seems that they are making every effort to ensure ODI success.