China's Global Ownership

We study the global footprint and real effects of Chinese overseas investment by assembling a comprehensive micro-level dataset of China’s ownership in 161,773 firms across 159 countries (2012–2021). Tracing multi-layered ownership chains through tax havens to ultimate owners, we show that China emerges as the fastest-growing outward investor, with foreign corporate control expanding at roughly 20% per year to just under 3% of global corporate assets, still below the United States in overall scale. Chinese investors—especially SOEs—target R&D-intensive, resource-rich, and supply-chain-connected firms. After acquisition, targets increase capital stock by 7.2% and R&D spending by 6.8% relative to non-target peers, but these inputs do not translate into higher patent output and are accompanied by lower profitability. Greater Chinese presence in a country–industry crowds out R&D at non-target firms, yet industry-level R&D, patenting, and performance remain broadly unchanged. Evidence on Chinese parents’ own patenting suggests that part of the innovation impact instead materializes at home. Compared with U.S., Japanese, and Indian overseas investment, China appears as a distinctively state-driven model that uses overseas control to build technological capacity while accepting weaker near-term performance.