Investment In China Research Articles

Environmental-social-economic synergy of China's investment on BRI countries

China's substantial capital investments in the Belt and Road Initiative (BRI) countries spur significant economic growth but also lead to environmental pressures. Capital assets, vital as production intermediates, are treated as consumer goods in traditional accounting, overlooking their productive attributes. To bridge the gap, this study uses the flow matrix method to endogenize Chinese investment capital into a global input-output model. We found that China's investments in 120 BRI countries resulted in a 55 Mt carbon footprint, 2.8 % of these nations' global investment carbon footprint, while generating $78.16 billion in economic benefits and supporting 7.2 million jobs. Moreover, these investments significantly boosted local employment, with Chinese investment labor intensity (labor per emission unit) exceeding the global average. If China applied its domestic technical standards to overseas investments, the investment carbon footprint in these countries could drop by 15.4 % to 47.1 Mt, and value-added and labor intensity could increase by 16.7 %.

A dataset of venture capitalist types in China (1978–2021): A machine-human hybrid approach

Despite escalating interest in distinguishing among various types of venture capitalists (VCs) and their roles in shaping entrepreneurship and innovation, such research remains sparse in the world’s second-largest VC market, i.e., China. To address this important gap, we have devised a machine-human hybrid approach to perform the classification task for VC types. Specifically, we have compiled a list of 49,187 VCs that made investments in China before 2021 from CVSource database, collected VC ownership information from other public sources, developed machine-learning algorithms to predict VC types, and used human coders when machine-learning failed to produce a prediction. Utilizing this hybrid approach, we have classified VCs into one of the following types: GVC (public agency-affiliated, state-owned enterprise-affiliated), CVC (corporate VC), IVC (independent VC), BVC (bank-affiliated VC), FVC (financial/non-bank-affiliated VC), UVC (university-affiliated VC), and PenVC (pension-fund-affiliated VC). We not only provide the most up-to-date database for VC types in the Chinese setting but also demonstrate how to leverage machine-learning algorithms to devise a transparent coding approach for VC-type classifications.

Exploring the mediating role of attitude in ESG investment intentions: insights from the Fogg behavior model

PurposeWith the growing global emphasis on environmental, social and governance (ESG) criteria, it is crucial to investigate the factors that influence individuals' intentions to invest in ESG and to understand the underlying mechanisms at play. This study constructs a theoretical model, grounded in the Fogg behavioral model (FBM), and explores the mediating role of ESG investment attitudes in shaping individuals' ESG investment behaviors.Design/methodology/approachA survey was conducted among ESG investors and potential ESG investors in China, resulting in 613 valid responses regarding ESG investment. The partial least squares structural equation modeling (PLS-SEM) approach was utilized to evaluate the proposed model and test the hypotheses.FindingsThe results reveal that future orientation, ESG investment bias and perceived ESG investment performance are significant determinants of ESG investment intentions, with attitude playing a partially mediating role. Furthermore, government support moderates the relationship between perceived ESG investment performance and investment intention.Originality/valueThis study expands the application of the FBM to the context of ESG investment and introduces a novel conceptual framework for understanding ESG investment behavior. The findings provide valuable insights for enterprises and institutions involved in ESG investment, aiding them in identifying and targeting potential investors more effectively. Additionally, the study offers a foundation for policymakers to devise strategies that promote sustainable development.

Estimating round‐tripping FDI from firm‐level data in China

AbstractWhen capital leaves a country and then flows back as foreign direct investment (FDI), we call it round‐tripping FDI. It is widely suspected that China's official FDI statistics contain a substantial amount of round‐tripping FDI. However, it is difficult to quantify the round‐tripping FDI due to the lack of data. In this paper, we propose two methods to identify round‐tripping FDI. The first one tracks capital flows at the firm level. If a firm in China invests in a foreign firm and this foreign firm makes an investment back to China shortly after, then we consider this investment to China as round‐tripping FDI. Our second measure of round‐tripping FDI adds to the first measure by including investments in China made by Chinese investors registered in tax havens. The first estimate of round‐tripping FDI accounts for up to 3% of China's total FDI from 1999 to 2015, whereas the second estimate accounts for up to 70% in the period. Our firm‐level analysis shows that industrial firms facing higher tax burdens are more likely to make round‐tripping FDI. We also show that at the city level, adjusted FDI statistics by subtracting the estimated round‐tripping FDI are better predictors of imports and exports. Finally, we show that provinces receiving higher shares of round‐tripping FDI are more likely to be punished for illegal financial activities. Taken together, these findings suggest that our measures of round‐tripping FDI, although noisy, are indicative of real transactions.

China's Patient Capital in Africa: Navigating Long-term Investments and Economic Cooperation

Abstract: In this article, it will undertake a comprehensive examination of "patient capital" within the context of China's foreign direct investment (FDI) in Africa, introducing the concept and its distinctive characteristics. This analysis is framed against the backdrop of China's evolving economic and trade relationships with other nations. Firstly, it will provide a brief literature review outlining the essence of patient capital and its application in China's FDI strategies. Subsequently, this paper will delve into the historical trajectory of China's direct investment in Africa, examining shifts from state-owned enterprises (SOEs) to private enterprises and their subsequent impacts on African economies. This section underscores the emergence of long-term oriented "patient capital" approaches, challenging perceptions of China's investments as purely altruistic. Furthermore, it will analyze the structural composition of China's investments in Africa, emphasizing the strategic focus on long-term gains and relationship-building. This analysis sheds light on the transformational nature of China's engagement in Africa, fostering sustainable development and enhancing African countries' autonomous production capacities. To contextualize China's approach, this paper will compare it with that of the United States, exploring differences in investment strategies, motivations, and their respective outcomes on African nations. Utilizing case studies, it will assess the multi-faceted impacts of these investments on African economies and their contributions to China's domestic economic advancement. This comparative analysis underscores the practical significance of China-Africa cooperation, highlighting a historical opportunity for mutual benefit and win-win outcomes. By emphasizing sustainable development and capacity-building, China's FDI in Africa presents a compelling narrative of shared prosperity and growth.

Investment Potential in Latin America under the Belt and Road Initiative

This study analyzes the current state, influencing factors, and potential of China's investments in Latin America under the Belt and Road Initiative (BRI). Through a systematic review of China's investments in sectors such as mining, energy, agriculture, infrastructure, and manufacturing in Latin America, the research explores the impact of geographical distance, institutional quality, infrastructure level, and cultural differences on Chinese enterprises' investments. The findings suggest that despite the vast geographical distance between China and Latin America, economic ties are strengthening through overseas infrastructure investments and financial cooperation. The study proposes policy recommendations to further promote bilateral investments through institutional reforms and localized strategies. The research provides theoretical support for Chinese enterprises' investment decisions in Latin America and serves as a valuable reference for policymakers.

Geography: The Geopolitics of China–Pakistan Relations

This article argues that Pakistan's strategic location provides a strong foundation for the durability of its relations with China. In support of this claim, it assesses the impact of other key factors, including the “Indian factor,” in this bilateral relationship. The article illustrates Pakistan's “advantageous” location compared to China's inherent geographical limitations. The Chinese elite realized geographical realities from the beginning and pursued a long‐term partnership with Pakistan. This was evident from China's investment in megaprojects in Pakistan, which were all premised on geography. Pakistan's geographical location has served China's interests in various ways, including breaking China's encirclement, acting as a gateway to the outside world, and preventing the infiltration of militancy into the mainland during the Cold War. Pakistan can potentially act as a hub between China and other regional countries in the context of the Belt and Road Initiative. The article diverts emphasis from the “Indian factor” to enduring geographical conditions as the basis for the durable Beijing–Islamabad partnership.

The Current Situation, Issues, and Improvement Measures of Foreign Direct Investment in China's Agricultural Economy

With the rapid development of economic globalization, the connections between countries have become increasingly close, and foreign direct investment has gradually become an important factor influencing the agricultural economic development of various countries. In order to achieve their own economic development, countries have actively sought to attract foreign investment. With China’s accession to the World Trade Organization and its active participation in global governance, attracting and utilizing foreign investment for domestic agriculture has become a strategic consensus for economic development amid intense global economic competition. This paper analyzes the history and current situation of foreign direct investment in Chinese agriculture, identifies the main issues faced by Chinese agriculture in utilizing foreign direct investment, and proposes corresponding solutions, including improving the foreign direct investment environment in Chinese agriculture and optimizing the structure of foreign direct investment sources.

Deterrent effects of targeted sanctions by mainland China on Taiwan: evidence from 2021–2 sanction events

AbstractWe investigate the deterrent effects of a firm‐targeted sanction and a politician‐targeted sanction deployed by mainland China against Taiwan to deter support for ‘Taiwan independence’. In the short run, we find that the signal sent by the targeted sanctions generated deterrence to firms that were not directly sanctioned, but were politically inclined towards ‘Taiwan independence’. Specifically, we find that those firms that donated more to the party that supports ‘Taiwan independence’, while investing in mainland China before the sanction, experienced a decrease in stock return. In terms of magnitude, for those firms entirely leaning towards ‘Taiwan independence’, their stock returns are expected to decrease by around 1.3–1.5 percentage points after the sanction events, which translates into a decrease in the overall market value of sampled firms by 0.305–0.604%. In the medium to long run, we find no evidence that firms affected by the deterrence of the sanction reduced their investment in mainland China as a behaviour response.

The impact of regional emergency logistics response capacity on sustainable economic growth in China

To assess the impact of China’s regional emergency logistics response capabilities on economic growth sustainability, this study develops a set of comprehensive indicators. It applies the entropy weight method combined with the TOPSIS method to evaluate these capabilities across regions. Based on panel data from 30 provinces in China from 2012 to 2021, this study employs panel models, panel quantile regression, and panel threshold models to analyze the impact of emergency logistics response capability on sustainable economic growth. By measuring the regional emergency logistics response capability and examining its effects on the sustainability of economic growth, this research provides foreign investors with a clearer understanding of the ability of different regions in China to handle unexpected public incidents. This, in turn, helps reduce investment uncertainty, mitigate certain risks, and offers valuable insights for enhancing the efficiency of international investments in China. Key findings are: (1) Since 2018, the establishment of the Ministry of Emergency Management has significantly improved China’s regional emergency logistics capabilities, with the eastern region outperforming the central and western regions. (2) Enhancing China’s emergency logistics response capability helps improve the sustainability level of economic growth. This reflects how China’s emergency management departments can mitigate the adverse impacts of public emergencies on economic growth by transforming social logistics into emergency logistics. (3) As emergency response capabilities have strengthened, their impact on economic sustainability initially decreased but later increased.

China's Investment in Bangladesh: Backdrop of Debt Trap Diplomacy

This research investigates the implications of Chinese investment in Bangladesh, particularly in the context of concerns surrounding debt trap diplomacy. As China extends its Belt and Road Initiative (BRI), Bangladesh has emerged as a significant recipient of Chinese loans and investments, encompassing infrastructure projects such as ports, power plants, and highways. While these investments are poised to bolster Bangladesh's economic development, they also raise concerns about the potential for unsustainable debt levels and the erosion of sovereignty. This study delves into the economic, political, and social ramifications of Chinese investments in Bangladesh. Through a mixed-methods approach combining quantitative analysis of debt sustainability indicators and qualitative assessments from stakeholder interviews, the research examines whether Chinese funding is leading to a debt trap scenario. Preliminary findings suggest that while Chinese investments have accelerated infrastructure development, they have also increased Bangladesh's debt burden and dependency on China. Furthermore, the strategic placement of investments suggests potential geopolitical motivations behind Chinese funding. This research aims to contribute to the broader discourse on the impact of Chinese foreign direct investment in developing countries, offering policy recommendations for Bangladesh to navigate the complexities of foreign financing without compromising its economic sovereignty. The study underscores the necessity for rigorous debt management and transparent investment policies to mitigate the risks associated with large-scale foreign loans.

Risk and Benefit Analysis of China’s Foreign Direct Investment in the Energy Sector: Case Study of the Belt and Road Initiative

Since 2011, China has been the world's largest energy consumer. The industrial sector uses two-thirds of the energy consumed in China. The main reason for investment in energy is that China is a net importer of energy, especially oil. The impact of Chinese foreign investments and the energy sector, which is the largest of the individual sectors, are the main subjects of the analysis of the presented paper. In the paper, we used the WoS viewer program to perform a bibliometric analysis of authors, countries, and keywords that deal with FDI. Subsequently, we used various scientific methods, such as the method of observation, method analysis, synthesis, comparison, exploration and explanation, to analyse Chinese investments that flow into multiple sectors worldwide, but especially into the countries participating in the Belt and Road Initiative and into the energy sector from 2013 to the present. As part of the Belt and Road Initiative, China invests in various projects in the form of "loans" and, in many cases, creates debt traps that allow China to seize the assets of participating countries. In this paper, we focused on the energy sector and its development so far within the given initiative, and we also defined what the initiative should focus on within renewable resources. China's energy investments include oil, hydropower, alternative energy, natural gas, and coal. The sharp drop in Chinese investment after 2019 was caused by the COVID-19 pandemic. To conclude, although energy has remained China's primary sector for investment within the BRI regions, Chinese capital has gradually diversified into sectors such as transportation, real estate, technology and innovation, and tourism.

Under the Belt and Road Initiative: A comparative study of the China investment in construction sector in Southeast Asia

This study investigates the impact of the Belt and Road Initiative (BRI) on the construction sector in Southeast Asia, focusing on Thailand, Malaysia, and Cambodia. Qualitative research approach is used to analyze the implications of Chinese investments in these countries, exploring both the opportunities and challenges faced by Chinese investors. Key research questions address the resilience of the construction sector, the obstacles encountered by investors, and the influence of policy on the construction business. Through interviews with CEOs and senior managers of major construction companies and a review of relevant documents, the study uncovers the economic and geopolitical motivations behind China’s BRI strategy. The findings reveal significant insights into the benefits and drawbacks of BRI financing, providing recommendations for overcoming challenges and leveraging future opportunities in Southeast Asian construction sectors.

Interpreter Intervention: Balancing Objectivity and Subjectivity in Business Negotiations

In the era of economic globalization, interactions and collaborations between China and the global economy have significantly intensified. This trend has led to increased foreign investment in China and a growing number of Chinese enterprises expanding their operations internationally. Successful business negotiations are crucial for these endeavors, yet they face challenges such as linguistic barriers, cultural differences, and divergent thought processes. In such high-stakes scenarios, an experienced interpreter serves as a vital communication link between Chinese and international parties. This paper aims to examine the role of dialogue interpretation in business negotiations and to investigate how interpreters can effectively leverage their subjective judgment alongside strategic translation techniques. By doing so, interpreters can facilitate smoother negotiations and contribute to mutually beneficial outcomes. The study will explore specific strategies that enable interpreters to bridge cultural and linguistic gaps, thereby promoting successful and harmonious negotiations.

The nexus of electricity infrastructure investment, household income, and carbon emissions in rural China

This study analyzes the nexus of electricity infrastructure investment (EII), rural household income, and household carbon emissions (HCEs) using panel data from China's 30 provinces from 2003 to 2020. Firstly, we consider the impact of EII on the direct HCEs (DHCEs) caused by the direct consumption of fossil fuels and investigate the mediating effect of income level and income variance. The empirical results show that the growth of EII reduces rural DHCEs through the transmission channels of income level, whereas income variance limits the negative relationship between EII and DHCEs. Then, we estimate the emissions embodied in household expenditure on goods and services of different income groups, that is, indirect HCEs (IHCEs), and develop a counterfactual scenario to assess the effects of EII on the total HCEs (the sum of DHCEs and IHCEs) in 2017. The scenario analysis indicates that without increased EII in 2017, the total national HCEs would increase by 0.9%, mainly due to the increased per capita HCEs of low-income groups (+11.6%). Besides, the total HCEs in ten provinces are influenced significantly by the change of income distribution driven by the change of EII, with Guangdong experiencing the largest decrease of HCEs (2.6 Mt) due to the movements of residents from the lower-income group to the lowest-income group. Thus, there is a trade-off between HCE reduction and poverty alleviation when developing EII in rural China.

China's Investment in Africa: Exploring the Human Rights Dimensions

China's Investment in Africa: Exploring the Human Rights Dimensions

Synergistic pathways for health investment and economic development in China: a fuzzy-set qualitative comparative analysis.

System coordination is an effective way to achieve high-quality development, and the debate on the interaction between health investment and economic development is still ongoing. To strengthen previous research and offer feasible advice and references for relevant stakeholders, we provide empirical evidence for exploring intersystem coordination and enhancement pathways using data from China. Based on the data published by the National Bureau of Statistics of China, the current status of the interaction and coordination between health investment and economic development in China was measured by calculating the comprehensive evaluation index, relative development degree, and coupling coordination degree. Subsequently, a fuzzy-set qualitative comparative analysis method was introduced to explore pathways for enhancing system interaction and coordination. There are obvious inter-provincial and regional differences between health investment and economic development in China. Provinces in the west and north are lagging in economic development, while provinces in the east and south are lagging in health investment. There is a clear synergy between health investment and economic development, and there is still much room for improving the degree of coupling coordination between systems. The five conditional configurations derived from the fuzzy-set qualitative comparative analysis yield three pathways for enhancing system coordination: a health expenditure-driven path, an economic development-driven path, and a balanced health investment and economic development-driven path. Health expenditure is sufficient for high coordination, and the level and equity of investment in health expenditure should be improved. The gross regional product is a necessary and sufficient condition for high coordination, and consideration must be given to strengthening the regional economic support capacity. Health investment and economic development can drive the coordinated development of the system in a balanced way. This enlightens us to give full play to the positive synergy between health investment and economic development based on promoting the benign interaction of subsystems.

Can Chinese investors manage climate risk domestically and globally?

Climate risk is increasing and poses a risk for investors in China’s traditional stock market. In this paper, we construct a TVP-VAR-DY model and use benchmark regression and asset portfolio to explore the impact of climate risk on the Chinese stock market and whether assets with risk aversion attributes or green and low-carbon features can effectively manage climate risk. In particular, we compare China’s climate risk with global climate risk and explore transition and physical risks separately. The results show that climate risk does affect the Chinese stock market and that Chinese climate risk has a greater impact on the stock market than global climate risk. However, the good news is that the metal assets, as well as the equity-type and bond-type green assets, are effective in reducing cross-market spillovers under China’s climate risk, indicating that these assets can provide diversification benefits against climate-driven risks domestically. We also find that the metals and the equity-type assets could dampen the spillover effect against global transition risk, and the bond-type ones serve this function against global physical risk. The results further show that, for China’s stock market investors, adding green bonds to their portfolios could reduce the downside risk, regardless of climate risk type or origin. In addition, we can infer that investors are suggested to use traditional safe-haven assets and bond-type green ones to manage climate risk.

CEO Overseas Experience, Cultural Distance and Corporate Financialization: The Mediating Effect of ESG Investment in China

CEO Overseas Experience, Cultural Distance and Corporate Financialization: The Mediating Effect of ESG Investment in China

Common institutional ownership and corporate maturity mismatch

Using data from Chinese listed firms from 2003 to 2022, we find that common institutional ownership significantly increases maturity mismatches of investment and financing by reducing the aggressiveness of corporate strategy. This relationship remains qualitatively the same after a battery of robustness and diagnostic tests and becomes stronger in observations with lower industry competition or economic policy uncertainty. Our study has implications for promoting institutional investors in China and forestalling major financial risks.