International

Muted Activity Marks Chinese Investment Into November’s End

Through the end of Thanksgiving week in the United States, investment activity in China was marked by a few headlines tied to deals of a relatively smaller size.

Singapore-based FinTech platform Active.AI said it raised $8.3 million from Vertex Ventures, which is the venture capital arm of Temasek Holdings. Additional investors included CreditEase Holdings, based in China. The Times of India reported news that the funds raised through this round will be used to expand the company’s operations in the United States and to hire additional staff.

As tracked by PYMNTS, investment activity in the Chinese economy in the quarter to date has come in at a bit more than $117 million, far below the roughly $540 million estimated for the same period last year — albeit there are a few more weeks left in the period.  Recent reports from the financial media presage activity that could heat up into the new year.

With some reference to fund flows from China — outward-bound, in other words — into India, CNBC.com reported that direct investment stood at about $1.6 billion in March of this year. And yet actual results may differ, significantly.

That $1.6 billion seems anemic when compared to the “stealth” figures that whisper true activity could be five times greater than that. Keep in mind this would stretch beyond FinTech, B2B and the like to include other areas. But it does point toward direction, if not dollar (or yuan size).

There will likely be some catching up to do, as Chinese President Xi Jinping pledged in 2014 to spend $20 billion through 2019 on investments in the Indian economy. As quoted by CNBC, official data tracks investments based in mainland China, bypassing efforts made from Chinese units that may, for example, be based in Macau, Hong Kong and even the United States.

Deals from Chinese investors have come in under the radar, with investments piling up in small sizes, at about $1 million each, for startups. To view multi-million (OK, multi-hundred million) dollar and even billion dollar deals, you’d have to look to Tencent and Alibaba. Those firms invested a cumulative total of just under $2 billion directly into the Indian economy through both venture capital and private equity deals in the past two years, noted CNBC.

This comes against a backdrop where, as estimated by KPMG earlier this month, FinTech investment is showing some staying power as firms in China invested as much as $1.2 billion in the third quarter of this year (in both the Chinese economy and abroad), up from $800 million last year in the third quarter.

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