Chinese Outbound Foreign Direct Investment: How Much Goes Where after Roundtripping and Offshoring?

Garcı́a-Herrero, Alicia; Xia, Le; Casanova, Carlos A.

doi:10.2139/ssrn.3160534

Cited by 9 publications

(8 citation statements)

References 21 publications

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“…In 2008, this differential was removed and the corporate income tax rate was unified at 25 percent. We are not aware of such tax or other incentives that could account for the earlier concentration of China's outward direct investment.27 Casanova, Garcia-Herrero, and Xia (2015) contend that the reported allocations of Chinese outward direct investment flows in 2013 may have been distorted by flows to "stop-over destinations" such as Hong Kong and offshore financial centers. They conclude that, after correcting for these distortions, China's actual outward direct investment may be more diversified than suggested by official data, with developed markets such as Europe and North America featuring more prominently.…”

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confidence: 99%

The Determinants of China’s International Portfolio Equity Allocations

Agarwal

Prasad

2020

IMF Econ Rev

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Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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confidence: 99%

The Determinants of China’s International Portfolio Equity Allocations

Agarwal

Prasad

2020

IMF Econ Rev

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“…Tax havens most frequently used by China are Hong Kong, the Cayman Islands and the British Virgin Islands. The second problem identified is round-tripping, when Chinese ODI is first channelled to a special purpose vehicle (SPV) in some foreign country in order to subsequently return to China, having all the advantages that China grants to foreign investors (Garcia-Herrero, Xia, & Casanova, 2015). Therefore, official ODI data from China are inaccurate and exaggerated.…”

Section: Outward Direct Investment and Chinamentioning

confidence: 99%

“…Government supportive policies surely boost Chinese ODI mainly by already mentioned low-cost capital but also by other means like privileged access to natural resources or subsidies. However, capital in China is still strictly watched, especially after the rapid rise in its outflow and unexpected devaluation of the Chinese yuan (RMB) in August 2015, and it is not easy to export it abroad, and that is why the whole approval or registration procedure of ODI is administratively burdensome (Garcia-Herrero, Xia, & Casanova, 2015).…”

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confidence: 99%

Determinants of Chinese Foreign Direct Investment in Central and Eastern Europe

Dayeh¹,

Janíčko²

2021

CEBR

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The article deals with China's outward direct investment (ODI) in Europe. The ODI has been on the rise and is unique in the sense that its development is much faster than of any other developing country. We investigate the determinants of Chinese ODI in ten countries of the Central and Eastern Europe in the time span of 2005 and 2018. Using panel data analysis, the regression model incorporates both traditional macroeconomic variables as well as selected institutional variables, trying to test which of those work best at explaining the Chinese investment activity in the countries of interest. The quality of the institutional framework is represented by EBRD indicators, which seem to be more suitable for transition economies. Findings generally suggest that Chinese multinational enterprises do not access Central and Eastern European countries primarily for market-seeking reasons. However, the fact of being a member of the EU helps Chinese ODI, since the membership is used as a sort of "backdoor" to the large European markets. Still, Chinese ODI are less likely associated with a sound institutional environment of a host country, as opposite appears to be true. These findings, therefore, support the hypothesis that access to the single EU market and R&D spending are more important determinants of the Chinese ODI than almost any other factors. Implications for Central European audience: The article explores the main drivers of Chinese foreign direct investment in the CEE region, while it employs the most relevant theoretical framework, including several recently developed theories. The quantitative analysis then thoroughly explores weight and sign of selected drivers using recent data and questions some of the conventionally accepted surmises about motivations of Chinese investment activity in the CEE region. This is an important topic given the ongoing debates about China's influence in the region as well as about intensity and general value added of its investment activity.

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“…25 Casanova, Garcia-Herrero, and Xia (2015) contend that the reported allocations of Chinese outward direct investment flows in 2013 may have been distorted by flows to "stop-over destinations" such as Hong Kong and offshore financial centers. They conclude that, after correcting for these distortions, China's actual outward direct investment may be more diversified than suggested by official data, with developed markets such as Europe and North America featuring more prominently.…”

Section: Foreign Portfolio Allocations Of Chinese Funds Across Countriesmentioning

confidence: 99%