Foreign direct investment (FDI) from China has recently met with increasing public opposition in many host nations. Why does the public respond less favourably to Chinese FDI than to FDI from other countries? We explore this question by conducting a series of survey experiments in Canada, where the majority of the public holds a negative opinion of Chinese investment. We find that the bias can be attributed to innumeracy about the relative size of China's FDI and misinformation about investment rules that govern FDI projects in Canada. Correcting both misperceptions substantially reduces the bias of respondents against FDI projects from China. These results suggest that corrective information can lead to positive change in public attitudes, a finding that has important policy implications for Canadian leaders hoping to expand the country's business ties with China.

Employing insights from political economics, international relations, and China studies, we identify the key variables that shape the dynamics of the U.S.–China rivalry and investigate their impacts on the bifurcation and value-chain decoupling processes. We show that the ongoing conflict and disengagement processes are more likely to evolve in the long run in significantly different ways to the one envisioned by current Washington decision-makers and echoed by Petricevic and Teece ( 2019 ). The latter predicted an escalation of the disengagement processes and inevitable convergence to a ‘bifurcated world’. Our main findings are: (1) The potential costs of bifurcation and consequent value-chain decoupling are prohibitive to both China and the U.S. Resistance is likely to grow by U.S.’ own MNEs and allies; (2) Washington decision-makers overstate the threats that ‘China’s rise’ poses to the survival of the liberal world order; and (3) China’s techno-nationalistic threats are likely to dissipate after a period of escalation, as a result of its own resource constraints, increasing costs of key programs, and inability to sustain in the long run its rapid innovation processes due to growing central controls. We conclude the paper by outlining an approach to maintain an open global economy and secure innovation systems.

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