The internationalization of Chinese companies What do official statistics tell us about Chinese outward foreign direct investment?

Purpose - The purpose of this paper is to offer a critical perspective on China s official outward foreign direct investment (OFDI) data, commonly used in most research on the internationalization of Chinese companies Owing to the deficiencies of China's statistical system official OFDI data leave us with only a limited understanding of the pattern of Chinese OFDI in general and cross border mergers and acquisitions (M&As) in particular Design/methodology/approach - Based on a theoretical discussion of the internationalization of companies some propositions about the development pattern of Chinese M&As are derived This study uses the Dealogic database which covers Chinese cross border M&As during the period from January 1999 to May 2007 in order to analyse the development trend geographical destination sectoral distribution and equity participation of Chinese cross border M&As Findings - First the growth of China's OFDI has not been as fast as expected while the development of cross border M&As has been very impressive Second, although official OFDI statistics reveal that km remains the most important investment destination our M&A data analysis shows that the developed countries in the West have attracted most Chinese cross border M&A investments Third in contrast to the official OFDI statistics our findings reveal a heavy concentration of M&As in mining and manufacturing Finally, our cross border M&A data suggest that Chinese companies predominantly seek high level equity participation in the acquired target companies abroad Originality/value - This paper fills a gap in the study of the development pattern of Chinese cross border M&A investments and offers a complementary view and a better understanding of the internationalization of Chinese companies