A new report outlines exactly where in the world China has been investing its money, with results that may be surprising to some.

For while the focus is currently on the lending China is undertaking to the developing world, some of the world’s most advanced economies remain the largest destinations for Chinese investment.

Since 2005, the US has had US$90bn of Chinese investment, almost US$20bn more than the next biggest destination, Australia (US$70.7bn). Next in line come Canada, Brazil and the UK, with Russia, Kazakhstan, Peru, Italy and Indonesia completing the top 10.

The report, authored by Derek Scissors at the American Enterprise Institute (AEI), also outlines that the US was the biggest recipient of Chinese investment over the first half of 2015.

“Large commodities producers such as Brazil, once popular with investors, are well down the list. This change in investment focus is reflected in sector allocations. Metals and, especially, energy spending showed pronounced weakness. This was offset by dramatic pick-ups in finance and transportation, along with continued real estate purchases,” Scissors writes.

Despite the relative trauma of a stock market crisis and the government’s previous determination to focus primarily on domestic consumption, Scissors’ research finds that China’s overseas investment increased by 14% in the first half of 2015, year on year – even in the face of declining commodity prices.

“Since 2005, the combined value of Chinese investments and construction transactions around the world stands at US$1.1tn,” Derek Scissors, American Enterprise Institute

However the nature of this investment has changed. While previous years’ layouts have been defined by huge splurges by the likes of Sinopec, hoovering up resources from commodity-rich parts of the Gulf, South America and Asia Pacific, this has largely been replaced – as mentioned – by investments in transportation and finance. And while China’s domestic real estate market has been sluggish, its investors have remained hungry for such assets overseas.

“Chinese firms are also prominent in global engineering and construction. Such contracts are made public more slowly than investments. Still, in the first half of the year, 30 countries awarded a Chinese firm a local contract worth US$100mn or more. Since 2005, the combined value of Chinese investments and construction transactions around the world stands at US$1.1tn,” says Scissors.

The largest destinations for construction investment by Chinese public sector and private sector firms remain those that are rich in commodities however, giving some credence to the widespread belief that China builds such projects in exchange for concessionary rates for energy and other vital commodities.

Since 2005, the biggest recipients in this sector have been oil-rich Nigeria and Venezuela, Pakistan, Saudi Arabia and Algeria. The likes of Vietnam and Indonesia, in which China has been heavily engaged in infrastructure work, follow next, with the top 10 made up by Ethiopia – a country rich in arable land – Malaysia and Iran, both of which have been actively seeking investment in energy infrastructure, particularly the latter, which has been frozen out of western debt markets for years.

We can expect this sectoral diversification out of China to continue, as it embarks on its ambitious Silk Road and AIIB initiatives, both of which will be heavily weighted towards infrastructure projects.

Earlier in July, GTR reported that the China Development Bank (CDB) and China Exim (Cexim) have redirected their lending patterns along the lines of the One Belt One Road raft of projects, which seek to recreate a complex trade transportation route along the land and seas stretching from Oceania to Western Europe.

In an email interview with this publication earlier this year, Scissors predicted that the slowdown in China’s GDP would adversely affect its overseas investment and lending, particularly for those countries reliant on China to purchase their commodities.

“Lower Chinese GDP growth has already hurt commodities exporters ranging from Australia to Venezuela. The question going forward is will China try to boost exports to bolster its own GDP. If so, China’s trade balances will rise and the rest of the world’s GDP will suffer,” he said, adding that lower commodities prices would benefit the Chinese consumer.

The scale of Chinese investment in certain parts of the world – both debt and equity financing – has been met with mixed responses. Infamously, Chinese workers on construction sites in parts of Africa have come under fire, given contractors’ policy of not hiring local staff for local jobs.

“The SOE is set to be at the centre of China’s overseas strategy for the years to come, with little privatisation on the horizon.”

In a move to curb China’s investment in assets, laws have been passed in both Australia and Canada which limit the amount of foreign direct investment made by state-owned enterprises (SOEs). Should it wish to be part of the future Trans-Pacific Partnership (TPP) free trade agreement with other countries in Asia Pacific, the wording of the agreement is likely to insist on reform for China’s behemoth SOEs, although separate research shows that their prominence is growing, rather than subsiding.

Analysts at the Mercator Institute for China Studies (Merics) found that rather than weakening the SOEs at the expense of private enterprises, recent reforms in China are likely to strengthen the public sector vehicles.

Reforms announced in November 2013 and built upon in May 2015 suggest that the SOE is set to be at the centre of China’s overseas strategy for the years to come, with little privatisation on the horizon.

“Since the publication of the 3rd Plenum of the CPC especially many foreign observers have speculated about the breaking up of monopolies. However, the current developments show that China is not allowing more competition but actually strengthening the market position of state-owned enterprises through mega mergers. It is therefore necessary to comprehensively correct the common interpretation of the reform resolutions made by foreign observer,” wrote Merics analysts, while also highlighting the fact that private companies are more profitable than SOEs.

They add: “Many state-owned enterprises are not only heavily in debt but despite generous subsidies also considerably less profitable than private Chinese companies. In light of the rapidly falling economic growth a reform is urgently needed in order to put an end to squandering of resources by public enterprises.”