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While Global FDI Falls, China's Outward FDI Doubles

Author

Listed:
  • Ken Davies

    (OECD)

Abstract

In 2008, global FDI fell by around twenty percent, while China's outward FDI nearly doubled. This disparity is likely to continue in 2009 and 2010 as China invests even more overseas. This article explains the five key drivers of China's outward foreign direct investment: its need to secure natural resources to fuel rapid growth; its need for services like shipping and insurance to support the high export volumes of domestic firms; the acquisition of global brands by China's major enterprises; the loss of the monopoly position of large state-owned enterprises; and the movement of labour-intensive operations to cheaper overseas locations like Vietnam and Africa.

Suggested Citation

  • Ken Davies, 2009. "While Global FDI Falls, China's Outward FDI Doubles," Transnational Corporations Review, Ottawa United Learning Academy, vol. 1(4), pages 20-23, December.
    • Handle: RePEc:oul:tncr09:v:1:y:2009:i:4:p:20-23
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    Citations

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    Cited by:

    1. Pradhan, Jaya Prakash, 2009. "The Global Economic Crisis: Impact on Indian Outward Investment," MPRA Paper 12324, University Library of Munich, Germany.
    2. Mortimore, Michael & Razo, Carlos, 2009. "Outward investment by Trans-Latin enterprises: reasons for optimism," Columbia FDI Perspectives 12, Columbia University, Columbia Center on Sustainable Investment (CCSI).
    3. International Monetary Fund, 2010. "FDI Flows to Low-Income Countries: Global Drivers and Growth Implications," IMF Working Papers 2010/132, International Monetary Fund.
    4. Szalavetz, Andrea, 2009. "Feltörekvő transznacionális társaságok - a kínai példa a klasszikus elmélet tükrében [Ambitious transnational corporations - the example of China in the light of classical theory]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1125-1137.
    5. Bellak, Christian & Leibrecht, Markus, 2009. "Improving infrastructure or lowering taxes to attract foreign direct investment?," Columbia FDI Perspectives 6, Columbia University, Columbia Center on Sustainable Investment (CCSI).
    6. Peter DRYSDALE & Shiro ARMSTRONG, 2010. "International and Regional Cooperation: Asia's Role and Responsibilities," Asian Economic Policy Review, Japan Center for Economic Research, vol. 5(2), pages 157-173, December.
    7. Jane Wenzhen Lu & Wen Li & Aiqi Wu & Xueli Huang, 2018. "Political hazards and entry modes of Chinese investments in Africa," Asia Pacific Journal of Management, Springer, vol. 35(1), pages 39-61, March.

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