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A Faustian bargain or just a good bargain? Chinese foreign direct investment and politics in Europe

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  • Sophie Meunier

Abstract

This article explores the political challenges posed by the recent influx of Chinese outward foreign direct investment (OFDI) into the European Union (EU), which has become in 2011 the top destination for Chinese investment in the world. The central political question facing European states welcoming the influx of Chinese capital is whether this is a good bargain—a positive-sum game where both investor and investee benefit—or instead a Faustian bargain—a zero-sum game in the long term where capital is accompanied by implicit conditionality affecting European norms and policies, from human rights to labor laws. The novelty of Chinese FDI has the potential to affect politics in Europe in three different venues: inside European countries, between European countries, and between Europe and third countries. This article, whose main goal is to launch a research agenda on the political implications of Chinese FDI, explores in turn its potential impact on foreign and domestic policy, institutional process within the EU, and transatlantic relations. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Sophie Meunier, 2014. "A Faustian bargain or just a good bargain? Chinese foreign direct investment and politics in Europe," Asia Europe Journal, Springer, vol. 12(1), pages 143-158, March.
    • Handle: RePEc:kap:asiaeu:v:12:y:2014:i:1:p:143-158
    DOI: 10.1007/s10308-014-0382-x
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    References listed on IDEAS

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    1. Sophie Meunier & Brian Burgoon & Wade Jacoby, 2014. "The politics of hosting Chinese investment in Europe—an introduction," Asia Europe Journal, Springer, vol. 12(1), pages 109-126, March.
    2. repec:awi:wpaper:0576 is not listed on IDEAS
    3. Haiyan Zhang & Daniel Bulcke, 2014. "China’s direct investment in the European Union: a new regulatory challenge?," Asia Europe Journal, Springer, vol. 12(1), pages 159-177, March.
    4. Brian Burgoon & Damian Raess, 2014. "Chinese investment and European labor: should and do workers fear Chinese FDI?," Asia Europe Journal, Springer, vol. 12(1), pages 179-197, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Marta Anna GÖTZ, 2015. "Pursuing FDI policy in the EU – Member States and their policy space," Journal of Economics and Political Economy, KSP Journals, vol. 2(2), pages 290-308, June.
    2. Alessandro Del Ponte & Paolo Canofari & Audrey De Dominicis, 2021. "Financial and trade relationships between the Eurozone and China in the age of resilience," Asia Europe Journal, Springer, vol. 19(4), pages 489-506, December.
    3. Cheche Duan & Yicheng Zhou & Dehong Shen & Shengqiao Lin & Wei Gong & József Popp & Judit Oláh, 2021. "The Misunderstanding of China’s Investment, and a Clarification: “Faustian Bargain” or “Good Bargain”? On the OFDI Data of Central and Eastern Europe," Sustainability, MDPI, vol. 13(18), pages 1-25, September.
    4. Babic, Milan & Dixon, Adam & Fichtner, Jan, 2021. "Varieties of state capital: What does foreign state-led investment do in a globalized world?," OSF Preprints tm82g, Center for Open Science.
    5. Flora Rencz, 2023. "The determinants of Chinese foreign direct investment in the European Union," Asia Europe Journal, Springer, vol. 21(3), pages 331-349, September.

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