China has enjoyed one of the highest rates of economic growth of any country during the past decade, but the go-go years are past, and growth is slowing. For Chinese institutional investors — many of whom have invested domestically — the slower growth in China means lower returns as well, so they are increasingly looking for investments outside their borders, and according to the U.S. Chamber of Commerce, U.S. infrastructure markets are one market that could soon be the destination for increasing amounts of Chinese investment capital.
“Greater uncertainty about domestic growth in China has increased awareness of the risks of maintaining domestically-concentrated portfolios and the benefits of global diversification,” notes the Chamber of Commerce’s recently released report, International to Interstates: Assessing the Opportunity for Chinese Participation in U.S. Infrastructure.
“Investment in U.S. infrastructure projects and firms thus offers Chinese firms a compelling opportunity.”
The Chamber outlines opportunities for equity investment in greenfield infrastructure projects and U.S. companies engaged in infrastructure, as well as P3 and other special purpose vehicles in infrastructure-related activities. The report also looks at project loans and debt instruments associated with infrastructure projects.