Theoretical Explanation of China’s Outward Direct Investment

PEI Changhong1 and FAN Ying2

1Director and research fellow of Institute of Economics, CASS
2Associate research fellow and Ph.D in economics, School of International Economics and Trade, University of International Business and Economics (UIBE)

Abstract:

Traditional foreign direct investment (FDI) theory only examines corporate investment motivation while neglecting government roles. China’s outward direct investment (ODI) is of both commercial and strategic significance to leverage domestic and international resources and markets. ODI is a corporate behavior but also is a means of achieving national strategies and heightening political and economic statuses. As a source of ODI, China should provide strong guidance and backing to corporate ODI for both commercial and national interests.

Key Words:

Foreign Direct Investment (FDI), national interest, investment source, outward direct investment (ODI)

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