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The ¡®Liability of Foreignness¡¯: Chinese Investment in Australia


  • Loong Wong

    () (Various Universities in Australia and Europe)


In the case of Chinese investment in Australia, most of the investment is undertaken by Chinese state-owned enterprises. As a consequence, they can leverage the massive resources available to them, and thus able to bypass some of the stages implicit in the internationalization thesis. These advantages are at the same time creating a problem for Chinese investors in Australia. Their ¡®foreignness¡¯, and in particular, their ownership has become a liability. They invoked fear and anxiety amongst the larger population and institutional friction is real. Australian companies, its media and government (including politicians and public officials) have found the idea of a putative Chinese takeover of Australia challenging and confronting. Using the case of Chinalco¡¯s bid for Rio Tinto, I seek to show how these institutional differences and the different logics engendered are played out and its attendant effects. The paper shows that theoretically and at a practical level, the internationalization of Chinese firms is a real challenge; it also argues that both Chinese firms and their Australian hosts have lessons to learn from each other. Arguably, there are also lessons for emerging firms and their internationalization into developed markets economies.

Suggested Citation

  • Loong Wong, 2012. "The ¡®Liability of Foreignness¡¯: Chinese Investment in Australia," Transnational Corporations Review, Ottawa United Learning Academy, vol. 4(4), pages 46-75, December.
  • Handle: RePEc:oul:tncr09:v:4:y:2012:i:4:p:46-75

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