Outward Foreign Direct Investment Motives with Chinese Characteristics

Abstract

This paper focuses on Chinas OFDI motives. Through reviews on the existing theoretical frameworks and studies in the field of Chinese OFDI, some insightfulness is derived. Chinas OFDI (Outward Foreign Direct Investment) is gaining momentum to catch up with its IFDI (Inward Foreign Direct Investment). IFDI to China has appealed to much academic attention and efforts, whereas Chinese OFDI gains less than it actually deserves. Chinas OFDI motives are with Chinese characteristics, among which the most significant feature is the strong dominance of the Chinese government, which is not like the Singapores government and GLCs. Existing theories fall short of explanatory power when confronting the Chinese case. In the diamond model, government is regarded as an external factor. However, China's government plays a core role and still overwhelmingly influences the outward foreign direct investment motives at the present stage.