China’s overseas investment policy: evolution and characteristics

This article aims to challenge the view in the existing literature that China’s outward foreign direct investment (OFDI) is guided by the Chinese government in a planned, purposeful, and unified way. By analysing the characteristics of the four stages of China’s OFDI policy, it is argued that China’s OFDI policy has gradually shifted from political opposition to selective approval and then enthusiastic encouragement, and policy relaxation has been pushed forward against the resistance of some government departments with conflicting interests. The evidence shows that the impact of China’s OFDI policy on its OFDI is not always as clear, unified, and purposeful as commonly believed, but tends to appear increasingly incoherent, disorganised, and disordered over time. In addition, Chinese enterprises usually aim to maximise their own commercial interests when investing overseas, rather than always following the policy guidance, giving priority to national interests, and achieving so-called strategic goals.