NCCR - The Rise of Chinese Multinational Enterprises

Chinese investors are increasingly exploring opportunities overseas in a wide range of industries. In this chapter the authors intend to contribute to the analysis of Chinese FDI. They first present a factual analysis of Chinese FDI and the emergence of Chinese MNEs, giving a statistical overview of the flows and stocks of Chinese FDI in different areas of the world, in various industries, and with regards to key characteristics of the Chinese MNEs expanding abroad.

Against this background they analyse the strategies of Chinese MNEs going international and pose the question: What are the comparative advantages specific to Chinese firms, and how do they translate into motivations to expand abroad? This question is crucial because the major impact of the growth of Chinese outward FDI, and the development of Chinese based MNEs, will be to enhance the internal efficiency of the Chinese economy.

The traditional theory on MNEs offers valuable tools with which to analyse their activities. However, this chapter underlines that the Chinese characteristics in this process are particularly striking, and make the emergence of Chinese MNEs a special phenomenon. According to the analysis presented in this contribution, the most important differences between Chinese MNEs and western MNEs going international are not to be found in their motivations, but in the special characteristics of their home country, namely the Chinese institutional and cultural context, and the home country resources. By far the largest outward investments by Chinese MNEs are made by state-owned enterprises, and all investment projects follow a scheme that ensures that they are strictly in line with government policies. Motivations of Chinese firms to internationalize and the government interest in this are to large extent aligned and institutionally intertwined.

More information on the book

# ISBN: 978-0-415-49084-9
# Binding: Hardback
# Published by: Routledge
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