Can China’s Agricultural FDI in Developing Countries Achieve a Win-Win Goal?—Enlightenment from the Literature

Abstract

Since 2014, there have been increasing numbers of undernourished people in the world, mainly distributed in developing countries. At the same time, the rapid growth of China's agricultural FDI (Foreign Direct Investment) has attracted international attention. There are different opinions on whether China's fast-growing agricultural investment can contribute to promoting global food security. The objective of the article is to clarify the consensus and differences of current research, and explore the actual impacts of China's agricultural FDI. This paper adopts the Grounded Theory to sort out the characteristics, reasons, and impacts of China's agricultural FDI and their intrinsic relationship. The results show that private enterprises are the mainstay of China's agricultural FDI, mainly concentrated in developing countries in Asia and a few developed countries such as Singapore, New Zealand, and the United States. As the investment model is transformed from land leasing to mergers and acquisitions, China's agricultural investment links are transformed from planting to full-industry chain operations. The motives of Chinese agricultural FDI are affected by corporate goals, national strategies, and the international environment. For China, overseas agricultural investment guarantees national food security, helps expand the agricultural product market, and enhances China's influence. For the host country, China's agricultural investment brings about agricultural technology, management experience, and employment opportunities. However, in the actual investment process, the investment model of land leasing has caused the instability of local farmers' livelihoods, and the excessive pursuit of profits by Chinese companies has also led to an unfair distribution of agricultural products. All of these may bring some challenges to the social and economic development of the host country to a certain extent, affecting the realization of win-win goals. In order to achieve a win-win goal, at the enterprise level, Chinese companies should make the investment model fit the interests and development goals of the host country, rationally choose the investment location, and abide by local rules. At the government level, the Chinese government should guide enterprises to focus on the less developed countries and regions that are most in need of introducing agricultural investment, and provide enterprises with risk protection. At the international level, it is necessary to strengthen the formulation and improvement of international agricultural investment rules, guide the public to form an objective understanding of agricultural investment behavior and impact, and create a suitable environment for international agricultural investment.

Socio-economic Impact of Chinese Agribusiness Entrepreneurs in Russian Far East on Local Farmers

“…Chinese companies are increasing their investments in foreign agricultural and food assets. Their broad aims are to gain profits for Chinese investors while achieving national food security and projecting China's influence abroad (Jiang et al, 2018). China's agricultural foreign direct investment (FDI) is concentrated in developed countries such as Singapore, New Zealand, the United States, Australia (Raymond et al, 2018) and Asian developing countries, one of these places is Russian Far East (RFE) (Buckley, 2019).…”

“…The author claims that Chinese workers in the RFE not only fill a labour shortage, but also contribute positively to local food security, with negative impacts being more socially normative and political, than economic. Jiang et al (2018) suggested that more on-the-spot investigations and investment project evaluations are needed to study the investment cooperation model that suits the interests of both parties in order to achieve a win-win goal. The three RFE's regions considered in this article are in the top 10 regions producing soybeans in Russia: they accounted for 38.6% of Russia's soybean production in 2018.…”

China’s Arable Land Investment in the “Belt and Road” Region: An Empirical Study of Overseas Arable Land Resources

“…For the host country, some studies consider investment in overseas farmland as a kind of "land grab" [7,8], and indicate that the rights of farmers in the host country are not effectively protected [8]. However, the Food and Agriculture Organization of the United Nations (FAO) reports indicate that overseas arable land investment is actually a kind of transnational investment [9], and other studies conclude that overseas arable land investment brings employment opportunities to farmers [10], and improves agricultural output levels by sharing agricultural science and technology in underdeveloped areas [6,11]. Although there are both supporters and opponents of investment in overseas farmland, as a developing country with poor arable land resources China's investment in overseas arable land has attracted great attention from international researchers [7, [10][11][12].…”

“…China's Ministries of Finance and Commerce jointly issued documents and notices giving financial support to overseas enterprises and investment-oriented Chinese enterprises [9]. In 2013, for the first time, the scale of China's investment in foreign agriculture exceeded the scale of investment by foreign entities in Chinese agriculture [10][11][12]. As part of its agricultural investment, China's investment in overseas arable land is expected to accelerate due to the country's "Belt and Road" initiative and the continuous increase in China's comprehensive national power [10].…”

“…However, it is still necessary to analyze the location characteristics and influencing factors of China's overseas arable land investment. On the one hand, before the economic reform and opening-up of China in 1978, China's overseas investment in agriculture was mainly aid-based [10,12], and many of its investments flowed to countries with which it shared close political ties, such as Algeria. However, with the establishment of the modern enterprise system of state-owned enterprises, private enterprises have since entered the field of overseas cultivated land investment on a large scale [12,21].…”