The Political Economy of Chinese Outward Foreign Direct Investment in ‘One-Belt, One-Road (OBOR)’ Countries

This chapter engages in an analysis of the political economy of Chinese outward foreign direct investment (COFDI) in ‘One-belt, One-Road’ (OBOR) countries between 2005 and 2014. Research findings yield a couple of interesting results. First, there is strong evidence supporting the resource-seeking motivation behind COFDI to OBOR countries. Secondly, in contrast to previous findings, this study yields some preliminary evidence that COFDI is more likely to seek out countries with low political risks. Thirdly, the results suggest that in addition to going to countries with good political relations with Beijing, COFDI has also been more likely to flow to countries with shared diplomatic interests and agenda with the United States. Taken together, these findings point to the politically driven nature of Chinese investment in OBOR countries and the potentially central role of the state in guiding Chinese investment in the region.