Strategic acquisitions and investments related to the Belt and Road Initiative by Chinese companies are expected to remain buoyant in 2017 despite an uncertain global political and economic outlook, according to a report on March 22.

Under Chinese government initiatives, countries in the Belt and Road region are emerging as hot spots for Chinese outbound foreign investment, especially in Southeast Asia and South Asia, because of their huge market potential, according to Deloitte’s 2017 Outbound Investment Guide for Chinese Businesses.

Western Europe and North America will continue as the largest recipients of Chinese outbound investment, but new political leadership in key economies in the regions will create adjustments in their trade relations with China.

Despite these changes, it is now an irreversible trend for Chinese companies to invest in overseas markets, and the Chinese government will continue to encourage strategic foreign investment by Chinese businesses as a way to optimize its economic structure, according to the report.

In 2017, Chinese companies will remain aggressive in acquisitions that are directly related to their core business, with the objective of gaining mature technology and supply chain resources.

Deloitte predicts that M&As related to smart manufacturing, the digital economy and upgrading consumption will take center stage in China’s outbound foreign investment this year.

“The year 2016 was marked by a series of black swan events signalling a drastic change in the current course of globalization. However, we see it as not so much the end, but a new chapter of globalization,” said Xu Sitao, chief economist at Deloitte China.

“In this new turn of globalization, we believe that China will undergo a transformation from passively participating in the global division of labor to actively reshaping the global value chain.”