Infographic: Which States Get the Most Chinese Investment?
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Which States Get the Most Chinese Investment?

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Which States Get the Most Chinese Investment?

Which States Get the Most Chinese Investment?

Part of being a global superpower is having some money to throw around.

Want to fund a giant 80 million person megacity in the Pearl River Delta for $322 billion? Piece of cake.

Re-build the Silk Road for up to $1 trillion? Not an issue.

But China doesn’t only show off its deep pockets domestically. The country has also been extremely active on the global market, buying up everything from natural resources in Africa to luxurious real estate in Manhattan. In total, Chinese companies have spent over $1 trillion on overseas investment over the last decade, and this has only accelerated in recent years as investors seek to acquire safe haven assets abroad.

America First?

Today’s infographic comes from SCMP, and it shows where Chinese overseas investment has been going, with a particular focus on the United States between 2000 and 2016.

Cumulatively, China has put $109.5 billion into the U.S. during this time period, with about 70% of that money coming from private companies. The sectors that have received the most Chinese investment so far include real estate and hospitality ($29.5 billion), information technology ($14.2 billion), energy ($13.4 billion), and entertainment ($8.8 billion).

According to Forbes, here were the five biggest investments made in the U.S. in 2016:

1. HNA Tourism Group gets 25% stake in Hilton for $6.5 billion
This deal helps Chinese conglomerate HNA and Hilton to take advantage of China’s growing tourism market both in China and internationally.

2. Tianjin Tianhai buys Ingram Micro for $6.1 billion
This is the biggest purchase of an American information technology company by a Chinese firm so far. Ingram Micro is the world’s largest wholesaler in technology products and services.

3. Haier Group buys GE’s appliance business for $5.6 billion
Haier is a massive consumer electronics and appliances company in China, with roughly $30 billion of revenue per year. However, the company has yet to make inroads in the North American market. This made buying GE’s appliances division a very strategic opportunity for the company.

4. Anbang Insurance pays $5.5 billion for Strategic Hotels And Resorts
One of China’s largest insurance companies bought 15 luxury properties, including the Four Seasons in Washington, D.C. and the JW Marriot Essex House in New York. The deal was originally valued at $6.5 billion, but one of the hotels was dropped after security concerns were raised due to its proximity to a U.S. naval base in San Diego. That property is worth approximately $1 billion.

5. Dalian Wanda buys Legendary Entertainment for $3.5 billion
Legendary Entertainment is a Hollywood production company that has the rights to popular films such as The Dark Knight, Inception, Jurassic World and Straight Outta Compton.

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Energy

Ranked: The Largest Oil and Gas Companies in the World

Oil still makes up the largest share of the global energy mix. Here are the largest oil and gas companies by market cap in 2021.

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The Largest Oil & Gas Companies in 2021

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

The pandemic brought strong headwinds for the oil and gas industry, and oil majors felt the blow.

Global primary energy consumption fell by 4.5% relative to 2019 and oil demand declined by 9%. For a brief period in April 2020, the price of West Texas Intermediate (WTI) crude futures went subzero, marking the largest one-day price plunge since 1983.

Some expected the demand crash to have a lasting impact on the industry, but it’s safe to say that 2021 has proved otherwise.

Oil Resurfaces as Energy Crisis Deepens

The world is facing a shortage of energy, and peak winter is yet to hit most parts of the globe.

Pandemic-induced supply restraints from producers, in addition to rising energy demand from recovering economies, have sent nations scrambling for petroleum products. Consequently, oil prices are resurfacing to pre-pandemic levels.

As of today, prices of WTI crude futures are at their highest levels in the last five years at over $80 per barrel. Furthermore, U.S. natural gas prices hit a 7-year high of $6.5 per million British thermal units (BTU) earlier this month. Elsewhere, European benchmark natural gas futures have surged 1,300% since May 2020.

Of course, the largest oil and gas companies are riding this wave of resurgence. Using data from CompaniesMarketCap.com, the above infographic ranks the top 20 oil and gas companies by market cap as of October 7, 2021.

Big Oil: The Largest Oil and Gas Companies by Market Cap

Given that we often see their logos at gas stations, the largest oil and gas companies are generally quite well-known. Here’s how they stack up by market cap:

RankCompanyMarket Cap* (US$, billions)Country
1Saudi Aramco$1,979Saudi Arabia 🇸🇦
2ExxonMobil$257.30U.S. 🇺🇸
3Chevron$205.29U.S. 🇺🇸
4Shell$175.28Netherlands 🇳🇱
5PetroChina$162.55China 🇨🇳
6TotalEnergies$130.56France 🇫🇷
7Gazprom$121.77Russia 🇷🇺
8ConocoPhillips$95.93U.S. 🇺🇸
9BP$93.97U.K. 🇬🇧
10Rosneft$84.07Russia 🇷🇺
11Equinor$83.60Norway 🇳🇴
12Enbridge$82.82Canada 🇨🇦
13Sinopec$80.48China 🇨🇳
14Novatek$79.18Russia 🇷🇺
15Duke Energy$78.08U.S. 🇺🇸
16Petrobras$69.91Brazil 🇧🇷
17Southern Company$66.64U.S. 🇺🇸
18Lukoil$64.70Russia 🇷🇺
19CNOOC$52.04China 🇨🇳
20Enterprise Products$50.37U.S. 🇺🇸

*As of October 7, 2021.

Saudi Aramco is one of the five companies in the trillion-dollar club as the world’s third-largest company by market cap. Its market cap is nearly equivalent to the combined valuation of the other 19 companies on the list. But what makes this figure even more astounding is the fact that the company went public less than two years ago in December 2019.

However, the oil giant’s valuation doesn’t come out of the blue. Aramco was the world’s most profitable company in 2019, raking in $88 billion in net income. Apple took this title in 2020, but high oil prices could propel Aramco back to the top in 2021.

Although Standard Oil was split up a century ago, its legacy lives on today in the form of Big Oil. ExxonMobil and Chevron—the second and third-largest companies on the list—are direct descendants of Standard Oil. Furthermore, Shell and BP both acquired assets from Standard Oil’s original portfolio on the road to becoming global oil giants.

The geographical distribution of the largest oil and gas companies shows how global the industry is. The top 20 oil and gas companies come from 10 different countries. The U.S. hosts six of them, while four are headquartered in Russia. The other 10 are located in one of China, Brazil, Saudi Arabia, or Europe.

Big Oil, Bigger Emissions

Due to the nature of fossil fuels, the biggest oil and gas companies are also among the biggest greenhouse gas (GHG) emitters.

In fact, Saudi Aramco is the world’s largest corporate GHG emitter and accounts for over 4% of the entire world’s emissions since 1965. Chevron, Gazprom, ExxonMobil, BP, and several other oil giants join Aramco on the list of top 20 GHG emitters between 1965 and 2017.

Shifting towards a low-carbon future will undoubtedly require the world to rely less on fossil fuels. But completely shunning the oil and gas industry isn’t possible at the moment, as shown by the global energy crisis.

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Markets

The World’s Biggest Real Estate Bubbles in 2021

According to UBS, there are nine real estate markets that are in bubble territory with prices rising to unsustainable levels.

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Ranked: The World’s Biggest Real Estate Bubbles in 2021

Identifying real estate bubbles is a tricky business. After all, even though many of us “know a bubble when we see it”, we don’t have tangible proof of a bubble until it actually bursts.

And by then, it’s too late.

The map above, based on data from the Real Estate Bubble Index by UBS, serves as an early warning system, evaluating 25 global cities and scoring them based on their bubble risk.

Reading the Signs

Bubbles are hard to distinguish in real-time as investors must judge whether a market’s pricing accurately reflects what will happen in the future. Even so, there are some signs to watch out for.

As one example, a decoupling of prices from local incomes and rents is a common red flag. As well, imbalances in the real economy, such as excessive construction activity and lending can signal a bubble in the making.

With this in mind, which global markets are exhibiting the most bubble risk?

The Geography of Real Estate Bubbles

Europe is home to a number of cities that have extreme bubble risk, with Frankfurt topping the list this year. Germany’s financial hub has seen real home prices rise by 10% per year on average since 2016—the highest rate of all cities evaluated.

housing bubble index 2021

Two Canadian cities also find themselves in bubble territory: Toronto and Vancouver. In the former, nearly 30% of purchases in 2021 went to buyers with multiple properties, showing that real estate investment is alive and well. Despite efforts to cool down these hot urban markets, Canadian markets have rebounded and continued their march upward. In fact, over the past three decades, residential home prices in Canada grew at the fastest rates in the G7.

Despite civil unrest and unease over new policies, Hong Kong still has the second highest score in this index. Meanwhile, Dubai is listed as “undervalued” and is the only city in the index with a negative score. Residential prices have trended down for the past six years and are now down nearly 40% from 2014 levels.

Note: The Real Estate Bubble Index does not currently include cities in Mainland China.

Trending Ever Upward

Overheated markets are nothing new, though the COVID-19 pandemic has changed the dynamic of real estate markets.

For years, house price appreciation in city centers was all but guaranteed as construction boomed and people were eager to live an urban lifestyle. Remote work options and office downsizing is changing the value equation for many, and as a result, housing prices in non-urban areas increased faster than in cities for the first time since the 1990s.

Even so, these changing priorities haven’t deflated the real estate market in the world’s global cities. Below are growth rates for 2021 so far, and how that compares to the last five years.

housing bubble price increases 2021

Overall, prices have been trending upward almost everywhere. All but four of the cities above—Milan, Paris, New York, and San Francisco—have had positive growth year-on-year.

Even as real estate bubbles continue to grow, there is an element of uncertainty. Debt-to-income ratios continue to rise, and lending standards, which were relaxed during the pandemic, are tightening once again. Add in the societal shifts occurring right now, and predicting the future of these markets becomes more difficult.

In the short term, we may see what UBS calls “the era of urban outperformance” come to an end.

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