Chinese investments abroad: examining the spillover effects in Eastern and Central Europe

Abstract

PurposeChinese investments abroad are being scrutinized more stringently because host governments fear that Chinese companies would steal domestically grown technology and know-how or be duped into a debt trap. The purpose of this paper is to provide a narrative of Chinese investments in a region that is neither developed nor underdeveloped – Central and Eastern Europe. The authors aim to provide an alternative view of Chinese investments abroad.Design/methodology/approachThe authors base their narrative on face-to-face semi-structured interviews with eight Chinese firms that carried out mergers and acquisition activities in the region.FindingsThe respondents claim that they saved companies and jobs in the aftermath of the global financial crisis. Access to the China market and elsewhere has increased as a result of these investments. Transfer of technology has gone both ways depending on which partner had superior technology.Research limitations/implicationsIt is important that Chinese investors emphasize the positive spillover effects from their investments, such as jobs saved, potential technology transfer and increased exports, when applying for FDI approval from host governments. Host governments, on the other hand, should evaluate each Chinese investment on its individual merits.Originality/valueThere is little that has been researched on the contributions of FDI from developing countries to host economies. This paper is an early attempt in this direction.