China Policy Institute: Analysis



China’s outward FDI to Europe after Brexit

Written by Hinrich Voss.

Chinese direct investments into the European Union have continuously grown since the financial crisis in 2008. This is partially explained by Chinese factors: the Chinese government’ ‘go global’ policy, the increasing global competitiveness of Chinese firms and rising demands in the domestic market have propelled China to be one of the three source countries for outward foreign direct investments (FDI). A share of that FDI flow, and that is the other side of the coin, is bound to be channelled to the European Union. Continue reading “China’s outward FDI to Europe after Brexit”

China goes Global: The Changing Value Chain

Written by Ilan Alon.

The globalisation of Chinese capital will be one of the hallmarks of 21st-century economics, shaping debates over state capitalism, ‘free’ markets and international institutions. The rise of Chinese multinationals has inflamed global fears about China ‘taking over’ the world. It is true that Chinese companies with global ambitions are on an international buying spree and that international mergers and acquisitions are on the rise. But current concerns about China’s future world domination are exaggerated; Chinese outward investment as a percentage of overall GDP is much lower than that of most developed countries and its share of global outward FDI is still relatively small. Continue reading “China goes Global: The Changing Value Chain”

Chinese investment trends in Europe: China casts its eye on Southern Europe

Written by Ivana Casaburi

It is known that China is going through a crucial period, transitioning from a middle-income country to a high-income country. This kind of transition requires companies to take a great leap forward in their competitive capabilities and become the trigger for this economic transformation. Some of these capabilities can be developed domestically, increasing R&D investment, but others have to be developed internationally. As a result, the transformation model of the Chinese economy is pushing its companies to invest abroad and look for the fastest way to develop some of these competitive capabilities. This fact brings us to 3 key points. Continue reading “Chinese investment trends in Europe: China casts its eye on Southern Europe”

Chinese Companies in Advanced Countries: Benefits and Challenges

Written by Ping Deng

Since Lenovo’s acquisition of IBM personal computers in 2004, China has emerged as the second-largest outward foreign direct investment (FDI) country in the world. In the last two years, Chinese firms undertook a number of merger & acquisition (M&A) megadeals, including Haier’s $5.4 billion acquisition of GE home appliances unit, Wanda’s $7.2 billion acquisitions in the U.S. entertainment industries, and China’s National Chemical Corporation’s $43 billion offer to buy Syngenta, a Swiss seeds and pesticide company. With China’s economy entering an important transition phase, Chinese firms are proactively pursuing overseas acquisitions in advanced economies as a primary way to build their high-end capabilities and upgrade their global value chains. The rapid growth of Chinese investment, particularly acquisitions of Western firms, highlights a relatively new and increasingly important channel to learn about one another, providing policymakers, scholars, and business practitioners with enormous implications. Continue reading “Chinese Companies in Advanced Countries: Benefits and Challenges”

China’s overseas investment: Opportunities and Challenges.

Written by Robert Taylor.

Aspiring to expedite the emergence of their country as a global economic power, in late 2000 the Chinese Communist Party (CCP) leaders launched the ‘going out strategy ‘ as one of the pillars of economic and social development, integral to which is the promotion of outward foreign direct investment. In the early years of China’s post-1978 reforms, overseas inward participation in the domestic economy had been invited to enhance managerial and technological competence. China’s outward investment now takes this process a stage further. In manufacturing, for example, the focus is on new advanced technology and expertise in specific managerial skills relating to marketing and branding. Continue reading “China’s overseas investment: Opportunities and Challenges.”

Introduction to Special Issue on Chinese overseas investment.

Written by James Farley.

Overseas investment has long been a vital part of China’s economic strategy.  During the difficult reconstruction period following 1949, resources were allocated to overseas investment as a means to engage with the wider world and form relationships with the stated aim of mutually beneficial development.  In more recent years, the nature of Chinese overseas investment has diversified considerably. Investors have engaged to an even greater degree with economies in Europe, the United States, Australia and Canada as well as continuing to foster strong links with developing countries. The rationale has remained the same, China still speaks of mutually beneficial development, but the challenges it now faces, as it engages with advanced economies, are rather different. In this special issue series of CPI: Analysis, we will explore the current state of Chinese overseas investment, considering both the challenges and opportunities that exist in the coming years. Continue reading “Introduction to Special Issue on Chinese overseas investment.”

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