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Chinese state???s economic cooperation related investment: An investigation of its direction and some implications for outward investment

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  • Sumon Kumar Bhaumik
  • Catherine Yap Co

Abstract

The Chinese state undertakes large scale investments in a number of countries under the auspices of economic cooperation related investment (ECI). While there are suggestions that it is an extension of China???s soft power aimed at facilitating Chinese FDI in those countries, often for access to natural resources, there is no systematic analysis of this in the literature. In this paper, we examine this investment of the Chinese state over time. Our results suggest that the pattern of investment is indeed explained well by factors that are used in the stylised literature to explain directional patterns of outward FDI. They also demonstrate that the (positive) relationship between Chinese ECI and the recipient countries??? natural resource richness is not economically meaningful. Finally, while there is some support for the popular wisdom that China???s willingness to do business with a country is not strongly affected by its level of corruption, there is much weaker support, if any, for the hypotheses that China favours doing business with countries where political rights are limited.

Suggested Citation

  • Sumon Kumar Bhaumik & Catherine Yap Co, 2009. "Chinese state???s economic cooperation related investment: An investigation of its direction and some implications for outward investment," William Davidson Institute Working Papers Series wp966, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2009-966
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    2. Annina Kärkkäinen, 2016. "Does China have a geoeconomic strategy towards Zimbabwe? The case of the Zimbabwean natural resource sector," Asia Europe Journal, Springer, vol. 14(2), pages 185-202, June.
    3. Juan Zhang & William X. Wei & Zuanshi Liu, 2013. "Strategic Entry and Determinants of Chinese Private Enterprises Into Africa," Journal of African Business, Taylor & Francis Journals, vol. 14(2), pages 96-105, August.
    4. Hong Fang & Bo Peng & Xu Wang & Siran Fang, 2019. "The Effect of Intellectual Property Rights Protection in Host Economies on The Sustainable Development of China’s Outward Foreign Direct Investment—Evidence from a Cross-Country Sample," Sustainability, MDPI, vol. 11(7), pages 1-14, April.

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    More about this item

    Keywords

    China; Economic cooperation related investment; Foreign direct investment; Natural resources; Institutional quality;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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