China’s FDI in the EU’s Environmental Protection Industries

Abstract

Abstract Purpose The objective of this chapter is to analyze China’s outward foreign direct investment (OFDI) to the European Union in environmental industries. Methodology/approach We combine a narrative approach with statistical analysis. We first review the policy background concerning China’s OFDI and environmental protection. Then, we provide statistics on China’s OFDI to the EU in environmental industries, using firm-level data from one of China’s major provinces: Jiangsu. Findings We find that the OFDI to the EU in environmental industries experienced a considerable growth in terms of number of investing firms and investment value. The OFDI in environmental industries to the EU was highly concentrated in a few countries, particularly Germany and Luxemburg, and a few industries, particularly new energy. Research limitations Using firm-level data from only one province may limit the generalizability of our findings. However, we believe the case of Jiangsu province sheds much light on the situation of entire China because Jiangsu is one of the most important Chinese provinces in terms of OFDI. Practical implications The detailed analysis of our Jiangsu’s OFDI in EU’s environmental industries in this chapter can help to inform the investment cooperation in environmental industries between China and EU in terms of both scope of investment partners and target industries. Originality/value This study is one of the first to provide a detailed summary statistics on China’s OFDI to the EU in environmental industries. Given China’s growing concerns regarding environmental protection and OFDI, we believe the question merits further analysis.