Tropical Geography ›› 2019, Vol. 39 ›› Issue (6): 942-953.doi: 10.13284/j.cnki.rddl.003198

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Review of Chinese Foreign Direct Investment from a Relationship Perspective

Zhou Zhengke1a, Liang Yutian1,2(), Zhou Keyang1a   

  1. 1. a. School of Geography and Planning; b. China Regional Coordinated Development and Rural Construction Institute, Sun Yat-sen University, Guangzhou 510275, China
    2. Guangdong Key Laboratory for Urbanization and Geo-simulation, Guangzhou 510275, China
  • Received:2019-06-28 Revised:2019-11-18 Online:2019-11-10 Published:2019-12-26
  • Contact: Liang Yutian


Through implementing the “Going Global” strategy and the Belt and Road Initiative, Chinese enterprises are accelerating their integration into economic globalization. Although China’s foreign direct investment (FDI) has been widely researched at home and abroad, domestic economic geography studies on the FDI of Chinese multinational enterprises are still relatively few or have just begun. To digest this situation, the present article reviews the literature of FDI from a relationship perspective. We argue that while the traditional theory explains Chinese FDI to some extent, it cannot easily explain some unique characteristics of Chinese firms, such as weak ownership advantages, rapid internationalization, and dependence on social networks. Therefore, it must be supplemented with Chinese-specific variables. First, the review focuses on the formal relation networks based on contracts, emphasizing how political and economic relations have influenced Chinese enterprises’ FDIs. On the one hand, China’s political system environment differs from that of western countries, and Chinese enterprises’ FDI is largely influenced by the government. This influence is reflected not only in state-owned enterprises, but also in the location selections of private enterprises. Both types of enterprises must consider the political relations between China and the host country of the enterprise. On the other hand, wider economic cooperation often extends the relation network. As Chinese enterprises usually lack investment experience in overseas markets, they tend to invest in countries or regions with business interactivity (psychological proximity). Close economic relations are usually one of the most important affecters of Chinese enterprises’ FDI. Second, we highlight that Chinese FDI largely and uniquely depends on informal relation networks based on emotion and kinship. Although many studies have focused on the role of overseas Chinese networks in inward FDI in China, the role of such networks in outward FDI by Chinese enterprises, with China becoming a FDI exporter, has not been fully revealed. Moreover, overseas Chinese networks play different roles in different network relations, which also warrant further exploration. Finally, the review proposes research directions for Chinese enterprises’ outward FDI with Chinese characteristics: (1) Constructing a theoretical framework of FDI based on Chinese characteristics; (2) further exploring the FDI of Chinese enterprises from a relationship perspective, in terms of both formal and informal relation networks; and (3) FDI research from the perspective of ethnic relation networks, which remains unexplored.

Key words: foreign direct investment, perspective of relationship, overseas Chinese network

CLC Number: 

  • F832.6