The Power of Foreign Direct Investment from China
China has been in the spotlight when it comes to foreign investment in the past few years. The country is rapidly taking control and ownership of most companies and business all over the world through the expansion of its existing companies and acquiring of new ones (Walter, 2018). The overseas market has been found to offer China a number of opportunities for not just improving its own economy, but also of gaining the economic strength of increasing its influence abroad.
Motivation/ Intended Results
This topic about the power of foreign investment from China is an interesting one since China has been known for its increasing trend of investing in overseas countries (Zhang, 2013). This research proposal is therefore intended to find answers to the following research objectives.
- To find out how foreign direct investment is improving the economy of China.
- To investigate some of the opportunities available that China is taking advantage of.
- To identify the main sectors that China has explored Investment Opportunities.
- To identify the Challenges Facing China’s Foreign Direct Investment.
Challenges Facing China in Foreign Direct Investment
The main challenge that has been facing China’s FDI has been unfavourable trade policies in certain Countries. The United States is known to have been in a trade dispute with China especially during the Trumps reign ("Does China dominate global investment? | ChinaPower Project", 2018). Donald Trump (The US president) has imposed tariffs and threats in imports from China so as to protect local firms (Taylor., 2017). An in-depth analysis of how the US and China trade dispute has affected FDI from China is discussed in this research.
Since China has been facing a lot of rejection and opposition from the governments of certain states in the world, it can choose to enter into equity joint ventures with other companies owned by investors outside China so that it cannot be viewed that China is not dominating the world through direct control of all business (Resmini & Siedschlag, 2013;"Foreign direct investment (FDI) in China - Investing - Nordea Trade Portal", 2018). With a joint venture, China cannot face the same disputes that it is currently facing.
To sum up, it is evident that China has acquired a lot of power when it comes to foreign direct investment. This is shown by the rapid overseas expansion of China's businesses into foreign markets across a range of sectors. The move has presented China with a lot of opportunities including economic strength and international business. Nevertheless, China has also been faced with a few challenges as discussed above.
Does China dominate global investment? | ChinaPower Project. (2018). Retrieved from https://chinapower.csis.org/china-foreign-direct-investment/
Foreign direct investment (FDI) in China - Investing - Nordea Trade Portal. (2018). Retrieved from https://www.nordeatrade.com/en/explore-new-market/china/investment
Resmini, L., & Siedschlag, I. (2013). Is foreign direct investment to China crowding out the foreign direct investment to other countries?. China Economic Review, 25, 1-16. doi: 10.1016/j.chieco.2012.12.003
Taylor., R. (2017). China’s overseas investment: Opportunities and Challenges. Retrieved from https://theasiadialogue.com/2017/05/22/chinas-overseas-investment-opportunities-and-challenges/
Walter, M. (2018). Power of foreign direct investment from China in US economy - News X. Retrieved from https://newsx.tv/2018/09/24/power-of-foreign-direct-investment-from-china-in-us-economy/
Zhang, A. (2013). Foreign Direct Investment from China: Sense and Sensibility. SSRN Electronic Journal. doi: 10.2139/ssrn.2307617