Chinese agricultural overseas investment: Trends, policies and CSR

Abstract

This short paper examines three key questions. First, what are the major trends, characteristics and importance of Chinese outward foreign direct investment (OFDI) in the agricultural sector? Second, what is the position of the Chinese government on Chinese agricultural OFDI? Last, to what extent do Chinese policies promote responsible agricultural OFDI? The paper first shows that China has become a major global source of OFDI in the agricultural sector, and to a significant degree, the investment targets developing countries, especially the ASEAN countries. The amount of Chinese agricultural OFDI is very likely to grow rapidly in the coming years because of a range of factors, especially the active promotion of the investment by the Chinese government. The paper then shows that there is a range of discourse and policies that target Chinese OFDI in general but relatively few are specifically related to the agricultural sector. The policies contain rather few and limited provisions related to corporate social responsibility, especially in terms of transparency and accountability. Although some Chinese agricultural companies have started to publicly report about the social responsibility of their overseas investment, this does not seem widespread. Hence, there are significant challenges to overcome if Chinese agricultural OFDI and investing companies are to become a positive force of sustainable development. At the end, the paper provides some policy and research recommendations.