Nature and effects of Chinese outward foreign direct investments.

Abstract

Chinese Foreign Direct Investment (FDI) outflows have been growing rapidly the last few years and are expected to grow further in the coming period. Still it has not yet received significant attention from academia. This paper highlights how FDI with Chinese origins differ from FDI sourced elsewhere. The argument is made that effects on recipient countries vary and a triangulated research, applying several methods is necessary in order to understand the full ramifications. A combination of quantitative and qualitative methods is therefore applied in an attempt to analyse Chinese FDI both on aggregate level and in those countries where it is most prominent. Key conclusions are that, although negative incidents have occurred, Chinese FDI can generally not be used to explain the recipient countries' lack of progress related to democratisation and human development. Furthermore, individual negative incidents are commonly used as a basis creating a discourse that criticises Chinese FDI in general. Such a simplistic view undermines the ability to understand the current and future impact of these investments on the developing world as a whole.