Essay About Chinese Foreign Direct Investment And Chinese Companies

Chinese Foreign Direct Investment and Argentina: Separating Fact from Fantasy
Essay Preview: Chinese Foreign Direct Investment and Argentina: Separating Fact from Fantasy
Report this essay
Chinese Foreign Direct Investment and Argentina: Separating Fact from FantasyIntroductionSome believe Chinese companies tend to invest more in countries with similar political ideologyArgentina ideal bc of large economy and population compared to other countries in the regionKirchnerism in Argentina: defaulted on international debt, lost access to IMF, needed China as means to get access to capitalMight have negatively impacted COFDIChinese investment in Argentina can be explained by OLI rather than ideology (Location mainly rich soil and special tax regimes)Local political interactions can have more negative impacts that bilateral international relationsEconomic RelationsEconomic relations have “center-periphery” characteristics: Argentina supplying primary goods while China supplies higher-valued goodsRestrictions on textiles and shoes from Argentina led to China restricting soy oil importsUS FDI increased even though government was anti USCase 1 HBNInternationalization benefits (land, plant, port)Circumvented laws through JVFailed due to political and public resistanceCase 2 SCCSCC saw locational advantages such as natural gas and tax incentivesCase 3 ICBCBought Standard Banks’ operations and renamed it into ICBC ArgentinaAccess to LALow asset pricesExpectation of more investmentReading 2:Chinese outward investments to emerging markets: evidence from Latin AmericaIntroductionMost ownership-advantages of Chinese companies are home-country-specific and network-basedLinkage-Leverage-Learning as extension of OLI (push and pull process, about strengthening resources and competitive position)Initial investment was pull from local JV partnerRapid internationalization through JV and related local networkSupport from Chinese government in LA not as relevant as it had been in developed economiesSeems to be most suitable to COFDI in LAChinese companies have gained ownership advantages that allow them to compete in emerging markets