ID | 135940 |
Title Proper | Myth of China’s overseas resource investment |
Language | ENG |
Author | Hongtu, Zhao |
Summary / Abstract (Note) | China is sometimes accused of taking a “strategic approach” rather than a “market approach,” taking resources “off the market” and conducting a state-orchestrated, worldwide search for energy and resources. Some go even further to claim that international acquisition by China’s firms represents a national strategy which aims to use resource diplomacy to conceal its ambitions for strategic expansion. Simply stated, China’s overseas investment serves its foreign policy (more than its economic requirements).[1] These perceptions seem to derive from the fact that China’s overseas direct investment (ODI) is focused on natural resources, and is mostly conducted by state-owned enterprises (SOEs). The reality, however, is less sinister. China’s ODI reflects, and is an extension of, China’s domestic economic structure. The majority of Chinese firms involved in China’s domestic and overseas resource sectors are still SOEs, but their share is decreasing with the rapid market transition and decentralization occurring in China. China’s firms are mostly driven by profit motives and competitive pressure rather than energy security considerations or resource acquisition. The enterprises, rather than the government, generally initiate overseas resource investment decisions, although the government supports them to invest overseas. |
`In' analytical Note | Global Review Vol. , No.4; Fal.2014: p.1-23 |
Journal Source | Global Review 2014-12 |
Standard Number | China |