China’s investment abroad: selected commentaries
Canberra: In the past half decade Chinese foreign direct investment has become a major element of global capital flows. Chinese investment abroad represents a new dimension of China’s integration into global economic and political systems. The upward trend is clear. As China relaxes restrictions on outbound capital flows, an increasing share of the country’s foreign asset holdings will likely shift from official holdings of foreign exchange reserves to direct investment abroad by Chinese companies.
The Chinese government’s encouragement for companies to ‘go global’ has seen Chinese state-owned enterprises (SOEs) secure a growing share of the international investment market, with particular interest in resource investment during the current global commodities boom or in technology acquisitions. With huge foreign reserves and access to low-cost funding, Chinese firms have begun to make a big wave.
But Chinese corporations have faced a number of problems in going global, including resistance in host countries, especially in the developed world; claims of neo-colonial motives in the developing world; and colourful reporting of their operations by foreign media. Chinese investors face a steep learning curve.
Host countries, too, are still working out how to judge their interests correctly in capturing the benefits from Chinese direct investment abroad — a major new source of investment when capital from developed economies is drying up.
Business abroad involves more than merely economic interaction between foreign enterprises and the state: it entails significant political interaction as well. This is particularly the case with China, as many of its overseas investors are SO Es. There is growing debate globally about whether and how the role of SO Es affects the benefits that host countries gain from Chinese investment abroad - a debate that is really about the interaction between national political institutions that are ordered around different principles and political constitutions, and how these institutions evolve in settings governed by market disciplines.
This issue of EAFQ assembles perspectives from top analysts to review the issue. It provides a start in serious and objective analysis of how we should properly look at the growth and reception of Chinese direct investment on the international stage.
- Readers can access the publication, 44 pages, here.
- Table of Contents
Ilan Alon: The globalisation of Chinese capital
David Shambaugh: Are China’s multinational corporations really multinational?
Yao Yang: A new form of colonialism?
Karl P. Sauvant: New kid on the block learning the rules
Yiping Huang: The changing face of Chinese investment
Peter Yuan Cai: The media narrative and the public debate
GAO Xiqing: Barriers and pitfalls on foreign paths
Daniel Rosen: Financial repression and outbound investment
Shiro Armstrong: Benchmarking performance: how large is large?
Raphael Kaplinsky: No simple pattern to Chinese foreign investment
Deborah Bräutigam: Using official development aid to support investment
Theodore H. Moran, Barbara Kotsc Hwar and Julia Muir: Resource procurement: not just a zero sum game
Peter Drysdale: Australia: time to adapt
Luke Hurst and Bijun Wang: Australia’s dumb luck and Chinese investment
Curtis J Milhaupt: A case of déjà vu for the United States
Hinrich Voss and Jeremy L. Clegg: Helping out the eurozone
Greg Mills and Terence Mcnamee: Disaggregating Chinese actors in Africa
Miguel Perez Ludeña: Adapting to the Latin American experience
Graeme Smith: Retail and infrastructure