Opportunity for Canadian Companies to Grow with Chinese FDI
Forthcoming report to highlight diverse opportunities with Chinese outbound investment
- USD1.5 billion of investments in 2015*
- Stands in contrast to record breaking 2015 for both Europe (USD23 billion) and US (USD15 billion)
- Significant increase in commercial real estate investments
- Diverse interest across sectors balances 81 percent decrease in energy sector investments
2015 presented a wider range of opportunities for Canadian companies to capitalize on Chinese foreign direct investments, as interest continued to move away from the energy sector and toward areas such as commercial real estate.
Exclusive data from our forthcoming report - Bird's-Eye View: Chinese Investment into Europe and North America - shows a major increase in commercial real estate investments by Chinese companies last year, totaling USD473 million, with especially strong interest in commercial real estate in Ontario. And the entertainment and transport/infrastructure sectors each counted more than USD300 million in investments as well.
Chinese FDI "not going away"
"In years past we looked at the energy industry as the focus of Chinese companies making investments in Canada," said Baker & McKenzie Partner Peter MacKay, the former Canadian Attorney General and Minister of Justice, Minister of National Defence, and Minister of Foreign Affairs. "While energy companies are looking to recover, Chinese foreign direct investment is clearly not going away and Canadian companies need to be aware of the opportunities, especially in commercial real estate. Some of Canada's leading enterprises, such as in the services sector, also could be the focus of increased investment from Chinese companies."
A genuine investment opportunity
Investment trends in Canada need to be compared to the US and Europe, where Chinese foreign direct investment broke records last year, reaching USD23 billion in Europe and USD15 billion in the US. Chinese FDI in Canada was at the lowest level since 2009, totaling USD1.5 billion in 2015.
"While investments last year declined 24 percent compared to 2014, this decline masks the widening interest by Chinese companies in other areas of strength in the Canadian economy," added Mr. MacKay. "Current and pending trade agreements can position Canada as a gateway for Chinese companies looking not only expand in this market, but also in the US and Europe, two of Canada's strongest trading partners."
*Closed deals only; 2015 data from Rhodium Group except where otherwise indicated. All figures USD.