China | Why China’s subsidy to the world is likely to endure

China is a significant net creditor to the rest of the world. At the end of 2020, its foreign assets totaled US$8,704 billion, or 59.1% of GDP, compared with foreign liabilities of US$6,554 billion, or 44.5% of GDP. 

Nonetheless, earnings on foreign liabilities (foreign capital in China) substantially exceed those on foreign assets (China’s investment abroad). In fact, the average rate of return of 6.0% on inbound capital in 2020 was double that on outbound capital.

Download the report to find out:

• Why is the gap in return so large?
• Will the yield gap narrow?
• Will China’s foreign assets and liabilities continue to rise?