Chinese firms ‘going global’: Recent OFDI trends, policy support and international implications

This article analyzes Chinese foreign direct investment. First, recent empirical trends are explicated, showing that Chinese firms ‘going global’ has taken off, with significantly rising investment even in developed economies. Analyzing the specifics of Chinese outward foreign direct investment (OFDI) also shows that the motives of Chinese firms going abroad are mostly economic. Second, the role of policy support in Chinese OFDI is elucidated, showing that Chinese style internationalization differs from liberal role models. This is explained by the domestic structure of China’s political economy. However, the prevalent image in the West that the internationalization of Chinese firms is mostly policy-driven is erroneous. Thus, third, the role of fragmentation and competition in China’s ‘going global’ strategy is elucidated. In the outlook, it is exemplified that the growing significance of Chinese firms results in a restructuring of global competitive relations, which some Western governments and firms regard with suspicion.