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Chinese Investment Into BRI Nations Hits Highest Since 2018

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(Bloomberg) — China’s investment into Belt and Road countries rose last year to the highest since 2018, a new report says, with companies putting almost $50 billion into overseas projects.

Total investment was almost 80% higher than in 2022 and helped take total engagement with the 150 countries that have signed up to the infrastructure initiative to more than $1 trillion since 2013, according to a new report from Griffith University in Australia and Fudan University in Shanghai.

Investment into high-technology projects, including electric-vehicle manufacturing, expanded substantially. The battery sector saw about $8 billion in engagement, the report said, driven by plans for a battery factory in South Korea and car plants in countries such as Thailand, Vietnam, Brazil and Hungary.

The report confirms recent data that showed China’s outbound investment last year rose to the highest since 2016, despite the domestic slowdown and concern in some nations about the nation’s influence and lending practices. The drop-off in BRI construction may reflect those worries, and a number of countries have restructured their debt in recent years, including money they borrowed to pay for Chinese-led infrastructure projects.

The average size of building projects announced last year was less than $400 million, the second lowest figure since the BRI began in 2013, according to the report, which said that this was likely due to China’s shift to “small and beautiful” projects.

The report classifies projects as part of the BRI if they occur after 2013 in countries that have signed a memorandum to join the initiative, even if they signed on much later than 2013. For example, in the case of Argentina which joined in 2022, any Chinese investment after 2013 is included.

The value of construction contracts should roughly track the value of overseas projects that are funded with loans from Chinese banks, while the investment figure follows overseas projects where Chinese companies have an equity stake, according to the report.

Read More: China’s Belt and Road Eyes Smaller Projects, More Use of Yuan

Because there is a possible overlap between the two and some Chinese construction contracts will be for projects funded by other countries, the report tracks engagement in the BRI, not the total Chinese financing of projects in the initiative.

Chinese President Xi Jinping launched the BRI a decade ago to boost economic ties and the influence of the world’s second-largest economy. It has always been loosely defined, with the label often applied to any projects in nations with friendly ties to China.

Italy announced it was pulling out of the agreement late last year, with Foreign Minister Antonio Tajani saying it had “not produced the desired effects.”

China will pursue BRI engagement this year to at least the level of 2023, wrote report author Christoph Nedopil, an economics professor. This would come “with a strong focus on BRI country partnerships in renewable energy, mining and related technologies.”

“Part of this expectation is driven by challenges in China’s domestic economic development, where Chinese companies seek opportunities in other countries,” he said.

–With assistance from Tom Hancock.

 

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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