Research Handbook on the Globalization of Chinese Firms
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Research Handbook on the Globalization of Chinese Firms

  • Elgar original reference

Edited by Craig C. Julian, Zafar U. Ahmed and Junqian Xu

This comprehensive research Handbook encompasses an expansive range of perspectives on the globalization process of Chinese firms. Eminent global scholars provide contributions on a variety of topics, including: • industrial innovation; • technological innovation and learning; • the performance of Chinese international joint ventures,; • the global consumer; • Foreign Direct Investment (FDI) including barriers to FDI and FDI in China’s hinterland areas; • the globalization of Chinese business practices in Africa; • the Human Resource Management Transfer Process; • Corporate Information Disclosure in China’s Stock Market; and • the home employment effect.
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Chapter 7: The national government's role in Chinese outward foreign direct investment

Dirk Holtbrügge and Sue Claire Berning

Extract

In addition to the vast amount of foreign firms' activities in China, which has made the country the world's second largest recipient of foreign direct investment (FDI) since 1992, Chinese outward foreign direct investment (OFDI) has become an important phenomenon in recent years. While in the 1990s, China annually attracted FDI inflows of USD 29 billion on average, but contributed less than USD 2.5 billion to global outflows (UNCTAD 2011), the announcement of the Go Global policy in 2001 marked a significant turning point in the development of Chinese OFDI. Once Premier Wen Jaibao declared the explicit encouragement of the Chinese government for more enterprises to internationalize, the pace of Chinese OFDI began to rise, with foreign acquisitions doubling from 40 in 2003 to 82 in 2006 and reaching a high of 298 in 2009 or some USD 73.2 billion (Alon et al. 2011). In 2010, Chinese OFDI reached 68.81 billion, which meant an increase of 21.7 percent compared to the previous year. By the end of 2010, more than 13,000 Chinese firms had established around 16,000 foreign subsidiaries, spreading globally to 178 countries. The accumulated OFDI net stock stood at USD 317.21 billion (MOFCOM 2010). In 2010, China ranked fifth among all economies in terms of OFDI flows and seventeenth in terms of stock (MOFCOM 2010). The majority of Chinese OFDI (65 percent) went to other Asian countries, whereas Latin America was the second most important recipient region with a share of 15 percent.

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