Drivers of Chinese Outward Foreign Direct Investment and the Location Choice

Abstract

In recent years, the outward foreign direct investment of Chinese enterprises has increased significantly under the policy support, but comparing with developed countries and the newly industrialized countries such as the United States and Japan, there are still some shortcomings in the location choice. Chinese outward foreign direct investment grows fast, and the investment location is relatively concentrated, diversified investment areas. Expanding market scale, reducing production cost, attaining technology and management skill are the main inside incentives for Chinese enterprises to invest abroad. The host country and home country’s political, economic, social and cultural environment are also important factors in promoting Chinese outward foreign direct investment. Based on this, Chinese enterprises should pay more attention to culture, social environment and geographic conditions when they implement outward foreign direct investment, so that they can catch the investment opportunities and do the proper investment location choice.