China's success in attracting the inflow of foreign direct investment (FDI) has been well documented. Less known is the initial success of China's “going out” strategy, which encourages domestic enterprises to participate in international capital market and to directly invest overseas. This article assesses the aggregate dynamics of China's outward FDI in a comparative prism. It traces the strategic shift of Chinese overseas investment in both arenas of government policy and corporate entrepreneurship. An emphasis is on the particularistic policies of the government and active responses of enterprises to the challenges and opportunities offered by globalization and the deepening reform. The article also discusses the strategic implications of emerging Chinese multinationals for their Western counterpart.
(Published Online September 21 2006)
1 We are grateful to Christopher Howe for his invaluable comments and suggestions. We have benefited from the comments of the seminar participants at SOAS of University of London and Royal Institute of International Affairs in London. Eunsuk Hong acknowledges gratefully the financial support of the ILJU Academic and Cultural Research Foundation of Korea.