Determinants of Chinese Foreign Direct Investment: Economic and Geopolitical Aspects

China has become since 1993 the largest recipient of Foreign Direct Investments (FDI) among developing countries, and by 2014 it will be the main source of these investments in the world according to UNCTAD (2012a). The objective of this work is to study China as a source of FDI flows possibly presenting geopolitical determinants. It suggests, using a theoretical survey, that the main theories of internationalization of firms cannot fully explain FDIs when they may be influenced by geopolitical objectives. It therefore argues that the Eclectic Theory of Internationalization can fill this gap, to the extent that it adds national goals, such as national power seeking, in its framework. This additional element could allow further characterizing the Chinese FDIs as tools to advance geopolitical objectives.

China; FDI; Internationalization; Geopolitics