Going Out or Opting Out? Capital, Political Vulnerability, and the State in China’s Outward Investment

How do state-business relations interact with outward investment in authoritarian regimes? This article focuses on the importance of domestic political status and specifically business’ vulnerability to the state in explaining the dynamics of China’s outward investments. I present three types of domestic capital whose economic and political logics differ as they go abroad: tactical capital pursues political power and prestige, competitive capital pursues commercial goals, and crony capital seeks refuge from the state and asset expatriation. The Chinese regime’s approach to outward investment, which I characterize as mobilization campaigns adjusted over time and combined with targeted domestic regulation, endeavors to treat these different kinds of capital differently, deploying and disciplining tactical capital, enabling competitive capital, and constraining crony capital.