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<p>This study investigates the growing risk aversion among Chinese investors and its impact not only on individual investment decisions but also on the broader strategic orientation of China’s Belt and Road Initiative (BRI). Confronted with escalating operational, environmental, and geopolitical uncertainties, Chinese firms have progressively shifted toward smaller-scale, lower-risk projects—indicating a significant transformation in the character of the BRI. To ensure methodological robustness, the analysis employs autoregressive models and structural break tests. Given the limited availability of disaggregated data specific to BRI-related outward foreign direct investment (FDI), the study utilizes total Chinese outward FDI from the World Bank’s World Development Indicators as a proxy. The empirical findings identify a notable structural break in 2017, reflecting a move toward more cautious investment behavior. This shift not only reorients Chinese FDI toward politically stable destinations but also constrains the overall scale and ambition of China’s overseas engagements. The study contributes to the evolving literature by demonstrating how heightened risk perceptions are reshaping China's geopolitical strategy, leading to a more restrained global investment approach.</p>

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Chinese Investors’ Increasing Risk Aversion: An Additional Factor Within China’s Comprehensive Belt and Road Initiative Geopolitical Strategy

  • 期刊论文

  • 发表日期：

    2025年7月14日

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  • Jhon Valdiglesias

摘要

This study investigates the growing risk aversion among Chinese investors and its impact not only on individual investment decisions but also on the broader strategic orientation of China’s Belt and Road Initiative (BRI). Confronted with escalating operational, environmental, and geopolitical uncertainties, Chinese firms have progressively shifted toward smaller-scale, lower-risk projects—indicating a significant transformation in the character of the BRI. To ensure methodological robustness, the analysis employs autoregressive models and structural break tests. Given the limited availability of disaggregated data specific to BRI-related outward foreign direct investment (FDI), the study utilizes total Chinese outward FDI from the World Bank’s World Development Indicators as a proxy. The empirical findings identify a notable structural break in 2017, reflecting a move toward more cautious investment behavior. This shift not only reorients Chinese FDI toward politically stable destinations but also constrains the overall scale and ambition of China’s overseas engagements. The study contributes to the evolving literature by demonstrating how heightened risk perceptions are reshaping China's geopolitical strategy, leading to a more restrained global investment approach.