China's Global Ownership

We study the global footprint and real effects of Chinese overseas corporate ownership. Using data on 161,773 firms across 159 countries from 2012–2021, we independently reconstruct multi-layered ownership chains to trace capital through offshore intermediaries to its ultimate origin. Chinese-controlled foreign assets grew by 20% annually, reaching $2.1 trillion, or roughly 3% of global corporate assets, by 2021. Chinese investors, especially state-owned enterprises, target R&D-intensive and supply-chain-linked firms. Following acquisition, targets increase R&D and capital investment without producing more local patents, while profitability declines. As Chinese-controlled assets rise within host-country industries, firms not yet under Chinese control reduce R&D, while controlled targets respond more positively. Among Chinese ultimate owners, acquisitions produce little change in total invention-patent volume but sharply reorient subsequent invention toward technologies of controlled foreign firms. Together, the results reveal a cross-border reorganization of innovative activity across targets, local peers, and Chinese ultimate owners.