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CASS: The Institute of World Economics and Politics of the Chinese Academy of Social Sciences released the Risk Rating Report on China Invested Countries (2019)

2019-01-16, by Zhu Gaolei, China Social Science Online,


The Press Conference site.(Journalist/Photographer Zhu Gaolei)

On January 10, 2019,  the Institute of World Economics and Politics, the Chinese Academy of Social Sciences (CASS) released the Risk Rating Report on China Invested Countries (2019) in Beijing, which is the sixth consecutive report issued by the International Investment Research Office of the Institute of World Economics and Politics.

The Risk Rating Report 2019 covers 57 main target countries that account for 86% of China's overseas investment flows in 2017 (excluding tax havens), and provides a sub-report on risk of " Countries along Belt and Road ". It aims to offer a comprehensive reference for Chinese enterprises with overseas investment needs, facilitating them to reduce overseas investment risks and increase the success rate of overseas investment.

From the perspective of overseas investment of Chinese enterprises and sovereign wealth, the report has five indicators— Economic base, Solvency, Social Elasticity, Political Risk and Relations with China— with 41 sub-indicators in total. The report comprehensively evaluates the main risks faced by Chinese enterprises in overseas investment from both qualitative and quantitative perspectives.

One innovative approach made by the rating system lies in the index marking the relationship with China, which is designed to rate the specific risks faced by China's overseas direct investment. It includes six sub-indicators: whether the two sides (China and the country China invests in) sign BIT, the degree of investment hindrance, bilateral political relations, trade and investment dependence, and visa free or not. The report shows that a good relationship with China is an important buffer to reduce investment risk.

According to the report, Germany still maintains its AAA rating, while the three most risky B-rated countries are Iraq, Venezuela and Sudan. The investment risk of "Belt and Road" sample countries is slightly higher than the overall level. The main risk lies in the economic and political area, while good relations with China help to reduce the investment risk.