China and the Multinationals

China and the Multinationals

International Business and the Entry of China into the Global Economy

New Horizons in International Business series

Edited by Robert Pearce

This original and important book explores how the interaction between China and multinational enterprises has the potential to affect the future of the Chinese economy, the global economy, and international business.

Chapter 8: The Political Economy of Infrastructure Multinationals: The Case of Chinese Investment in Africa

Yuxuan Tang and Robert Pearce

Subjects: asian studies, asian business, asian economics, business and management, asia business, international business, strategic management, economics and finance, asian economics


Yuxuan Tang and Robert Pearce INTRODUCTION In this exploratory chapter we seek to investigate the nature and interaction of two of the most important and enigmatic new forces in international business; the growing role of multinational enterprises (MNEs) in the creation of infrastructure in developing countries and the emergence of MNEs from China. Both of these new types of MNE have been defined within, and are responsive to, important trends in the development of the global economy. In the case of infrastructure the rise of MNEs reflects the widespread privatisation of its creation and provision, but with the position of the sector nevertheless still determined within government-defined development programmes. Though emergence of Chinese MNEs would not be surprising given the growth and opening of the economy, the speed and form of their arrival may, in fact, reflect more specific needs of Chinese development as perceived through government policy. Similarly, the ability of Chinese MNEs to establish international operations may derive institutionally from the wider competitiveness of their home economy; for example, in the form of preferred access to cheap capital. Here we seek to draw out important aspects of these two phenomena through an investigation of a major context for their interaction; the involvement of Chinese firms in generation of infrastructure capacity in Africa. This context, as indicated above, places the issues raised by participation of Chinese infrastructure MNEs (IMNEs) in Africa beyond the normal concerns of international business, by invoking both the wider needs of economic development in Africa...

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