China's Outbound Direct Investment

1218 WordsMay 1, 20165 Pages
The type of China’s outbound direct investment has also evolved over the years. In the 1980s and 1990s, China’s ODI was largely undertaken by state-owned enterprises (SOEs) which focused on acquiring assets in natural resources, infrastructure and logistics (Rosen & Hanemann, 2009). This type of ODI was used to meet the demand of a growing China that needed commodities such as oil, iron, timber, and cement to develop its infrastructure and provide the resources needed for its cities to quickly urbanize (Rosen & Hanemann, 2009). There are not ample amounts of these commodities in China, thus Chinese resource firms turned abroad to secure supplies of these natural resources through mining and other extraction investments (Rosen & Hanemann, 2009). In the past five years, however, China’s outbound direct investment has entered a “new era” as Chinese investment interest has shifted from targeting resource-rich developing countries to advanced economies (Hanemann & Huotari, 2015). Though energy is still a targeted industry, “Chinese firms are eager to acquire advanced manufacturing assets that allow them to modernize technology and move up the value chain” (Hanemann & Lysenko, 2013, p.1). This has led to increased Chinese investment in developed economies, including the United States and Europe, in sectors like high tech, modern service assets and infrastructure (Hanemann & Lysenko, 2013). Chinese direct investment in the United States Historically, foreign direct investment
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