HOW IS THE “CHINA BRAND” IMPACTING ON GLOBALIZATION? EXAMINING NEW FDI PATTERNS FROM A JAPANESE HISTORICAL PERSPECTIVE

Abstract

This article is aimed at better understanding China's Overseas Foreign Direct Investment (OFDI) choices through a post-War Japanese historical perspective. It will focus in the main on OFDI as a marker of an advanced stage of the East Asian ‘developmental state’ formula, wherein the ‘China Brand’ takes shape. The transition process from heavy-industry and low-value added goods to frontier-technology manufacturing with global brand recognition will be placed under scrutiny. A Japanese perspective is called for, as much of the theory in the field of international business to do with OFDI and the growth of multinational corporations (MNCs) is currently primarily derived from a Western developed-economy setting, and hence does not seek to offer much in the way of predictive insight about all-important yet middle-income China, as it proceeds towards becoming the largest economy on the planet. The article surveys the historical trajectory of Chinese OFDI, underling its correlation with inbound foreign investment into China; it then offers a comparative view of Japanese OFDI in the pre- and post-War era. It then assesses Chinese brand strength in the electrical appliance, automobile, and IT areas. Finally, it offers a prognosis as to the future direction of Chinese OFDI, and how it might affect the contours of globalization as well as Sino-American rivalries.