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China’s Regulatory Framework for Outward Foreign Direct Investment

Sauvant, Karl P.; Zitian Chen, Victor

China has become the world’s third largest outward investor, behind the United States and Japan. A growing body of literature suggests that China’s regulatory framework for outward foreign direct investment (OFDI) is a determinant of the country’s rising OFDI. This paper presents a holistic review of that framework, including some possibilities for its improvement. Overall, China’s framework serves two objectives: to help Chinese firms become more competitive internationally and to assist the country in its development effort. In pursuing these objectives, the regulatory framework has moved from restricting, to facilitating, to supporting, to encouraging OFDI; but there are still strong elements of administrative control that make it cumbersome. State-owned enterprises (SOEs) seem to benefit particularly from the current framework when internationalizing through FDI.

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Also Published In

Title
China Economic Journal
DOI
https://doi.org/10.1080/17538963.2013.874072

More About This Work

Academic Units
Law
Published Here
February 3, 2017
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