(Yicai) Sept. 8 -- More Chinese investment has been heading towards emerging markets since the Belt and Road Initiative was launched in 2013, according to a recent report compiled by the research and analysis division of the Economist Group.

Countries in Southeast and South Asia in particular have climbed steadily in the China Going Global Investment Index compiled by the Economist Intelligence Unit over the past 10 years, reflecting the region’s robust growth outlook, growing middle class, abundant strategic natural resources and relative openness towards Chinese investors.

Singapore tops the rankings as the most attractive destination for Chinese investors, and its appeal lies in its status as an established global business hub, its cultural ties to China and its neutrality in the tensions between China and the West, according to the report ‘China Going Global Investment Index 2023—The Belt and Road Initiative’s Second Decade’ that was released yesterday.

Indonesia, with its plentiful nickel reserves which is a key material used in electric car batteries, its abundant cheap labour and vast market, ranks second. While Malaysia and Thailand place third and fifth respectively, due to their low labor costs and large markets. India, hampered by strained bilateral relations, only ranks eleventh.

China’s import diversification strategy dictates that it will not rely on a single market for the supply of commodities, so other countries have seen improvements in their rankings, thanks to their close ties with China, market size or critical position in the global supply chain, the report said For example, Chile and Qatar rank tenth and sixteenth, respectively.

Although Mexico has been attracting investments from companies seeking entry into the US, it ranks quite low at number 22 due to its distance from China. Other countries like Russia, Iran, Ukraine and Venezuela also place far down their list, mainly due to risk considerations.

“We forecast China to regain its position as the second-largest source of overseas direct investment by 2024. The flow of ODI is set to grow further in the coming decade, after enthusiasm waned briefly in recent years,” said Chim Lee, China analyst at London-based EIU.

But Chinese investors, who are getting more risk-aware, should identify overseas investment destinations with higher operational, financial and sanction risks, and pay close attention to geopolitical trends in order to mitigate related risks, he added.

Editor: Kim Taylor