Foreign direct investments in the BRICS countries and internationalization of Chinese capital

Abstract

This article aims to analyze the economic integration of the BRICS countries through foreign direct investments (FDI) since the first summit of the group in 2009. The investigation shows that this integration is very asymmetric due to the preponderance of Chinese investments in other BRICS countries. Hence, the paper sets an associated objective, focusing on the evaluation of diverse patterns of internationalization of Chinese capital and its impact on the investments within the bloc. In line with these goals, the paper’s methodology involves several progressive steps. First of all, we are developing a data analysis of FDI in BRICS. Given the absolute dominance of China’s investments within the bloc, we are shifting the focus to these Chinese outward foreign direct investments (OFDI). In order to cope with this requirement, we are promoting qualitative and quantitative analysis. The qualitative analysis consists in the perception of heterogenous motivations that induce the internationalization of Chinese capital through examining the strategies of three groups of economic agents in China: (1) state-owned enterprises (SOE) operating in traditional sectors, (2) big companies preponderantly oriented on the domestic market, and (3) technology-based companies. The quantitative analysis lies in the scrutiny of the available data on Chinese investments in other BRICS countries. As a result, the main contribution of this article lies in the characterization of heterogeneous strategies of the internationalization of Chinese capital and their analysis within the framework of the asymmetric productive integration within BRICS.