The uniqueness of Chinese outward foreign direct investment

Abstract

This article is about China’s outward foreign direct investment, a relatively new but fast-growing feature of the global economy. It is causing concern and uncertainty in many recipient countries that, more generally, happily welcome foreign direct investment. The author explores some of the reasons why. The article examines, in particular, the state ownership and management of major Chinese corporations, state influence over their policy direction and the impact of funding through state-owned financial institutions. The author concludes that Chinese outward foreign direct investment is very different from the norm of a conventional, capitalist, market economy and inescapably carries political overtones.