An Overview of China’s Investment in the Australian Mineral Industry: Theoretical Perspective and Investment Characteristics

The huge increase in China’s ODI has seen it expand as a major source of investment from $270 million in 2002 to $56.53 billion in 2009 (Ministry of Commerce, 2010). By 2009, China’s total ODI stock had reached $245.75 billion, with more than 1200 Chinese enterprises having invested in over 13,000 firms abroad (Ministry of Commerce, 2009, 2010). China’s ODI surged in 2008, as Chinese enterprises, both state-owned and privately owned, capitalised on the global financial crisis. Furthermore, this trend is expected to continue due to the increasing participation of state-owned enterprises (SOEs) and privately owned enterprises (POEs) in their international business activities, support from Chinese governments, better facilitation and services by Chinese financial institutes, such as banks and insurance companies, and China’s vast foreign currency reserves. Although China started its “open door” policy in 1979, research efforts have been devoted overwhelmingly to FDI rather than ODI. In their review of the literature in 15 leading management journals between 1993 and 2006 on FDI, Lau and Bruton (2008) found only two articles on China’s ODI, compared with 172 articles on FDI in China. Nevertheless considerable progress has been made on China’s ODI recently, particularly for entry modes, motivation and location of Chinese ODI for SOEs (for example, Buckley, Clegg et al., 2008; Buckley, Cross, Tan, Xin, & Voss, 2008; Deng, 2009; He & Lyles, 2008).