Multinational companies at the intersection of home and host country foreign direct investment policies: an analysis of Chinese investments in Europe

Previous research has suggested that home and host government policy can increase or decrease the likelihood of OFDI and IFDI entry into particular host countries. In terms of investment flows, China became an important acquirer of corporate assets in the U.S.A. and Europe until 2018 when both the U.S.A. and Europe became much more cautious in its policies and protective in its practices. In order to inform the current policy debate with regard to Chinese investments in Europe, the chapter analyzes the historical policy perspective with regard to inward and outward FDI. It subsequently analyzes Chinese and European policies towards outward and inward FDI, respectively. Then, the authors focus on the intricacies of Chinese policies to assist their firms in their internationalization processes as well as those regulations to control them. Subsequently, the chapter looks at the changing the European inward FDI landscape, in particular for Chinese firms, discusses the impact of these policy contexts for Chinese firms, and tries to draw conclusions and recommendations for firms and government policies alike.