Hostname: page-component-cd9895bd7-fscjk Total loading time: 0 Render date: 2024-12-26T16:53:04.122Z Has data issue: false hasContentIssue false
  • English
  • Français

Chinese Outbound Investment in Australia: From State Control to Entrepreneurship

Published online by Cambridge University Press:  22 October 2019

Wei Li  and
Hans Hendrischke
Wei Li*
Affiliation:
The University of Sydney Business School.
Hans Hendrischke
Affiliation:
The University of Sydney Business School. Email: [email protected].
*
Email: [email protected] (corresponding author).
Get access Rights & Permissions [Opens in a new window]

Abstract

This article contributes to our understanding of Chinese corporate expansion into developed economies by using Australia as a case study of how, in the 2010s, Chinese firms began transiting from government-driven resource investment to entrepreneurial expansion in new industries and markets. We contextualize this process by demonstrating how changing market demand and institutional evolutions at home and in the host country created new motivations for Chinese investors. In particular, the decline of active government control in China over the overseas operations of Chinese firms and the more business-oriented regulatory regime in Australia empowered local subsidiaries of Chinese firms to become more entrepreneurial and explorative in their attempts to compensate for their lack of competitiveness and weak organizational capabilities. Consequently, Chinese firms brought their domestic experience and modus operandi to the Australian host market and collectively adapted and deployed dynamic capabilities such as the use of network linkages, experiential learning and corporate reconfiguration. We find that this transfer of capabilities was facilitated by the co-evolution of the Chinese and Australian institutional and market environments and has maintained Australia's position as one of the major recipient countries of Chinese outbound investment, opening the Australian economy to ongoing expansion and disruption.

摘要

摘要

本文以澳大利亚为案例，研究中国企业在发达经济体的扩张，详细阐述了2010 年以来，中国企业如何从政府驱动的资源投资转向新兴产业和市场的企业扩张。我们通过展示国内和东道国不断变化的市场需求和制度变迁，解释了中国投资者如何在新的环境下找到新的投资动机。特别是，政府对中国企业海外业务的控制力度下降以及澳大利亚更加注重商业的监管制度使中国企业的海外子公司在试图弥补其缺乏竞争力和弱势方面变得更具创业性和探索性。因此，中国公司将其国内经验和运作方式带到澳大利亚，并共同调整和部署动态能力，如使用网络关系，边做边学和企业重组。我们发现，中国和澳大利亚的制度和市场环境的共同演化促进了这种能力的转移，并保持了澳大利亚作为中国对外投资的主要接受国之一的地位，使澳大利亚经济持续扩张和面临新的挑战。

Keywords

ODIChinaAustraliainstitutionsentrepreneurship对外投资中国澳大利亚制度创业性
Type
Research Article
Information
The China Quarterly , Volume 243 , September 2020 , pp. 701 - 736
Check for updates
Copyright
Copyright © SOAS University of London 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

ABS (Australian Bureau of Statistics). 2017. “International investment position, Australia: supplementary statistics, 2016.” Released 10 May 2017. https://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/5352.02016?OpenDocument.Google Scholar
Allen, Franklin, Qian, Jun and Qian, Meijun. 2005. “Law, finance, and economic growth in China.” Journal of Financial Economics 77(1), 57–116.10.1016/j.jfineco.2004.06.010CrossRefGoogle Scholar
Amit, Raphael, and Livnat, Joshua. 1988. “Diversification strategies, business cycles and economic performance.” Strategic Management Journal 9(2), 99–110.10.1002/smj.4250090202CrossRefGoogle Scholar
APRA (Australian Prudential Regulation Authority). 2017. “Quarterly authorised deposit-taking institution performance statistics,” https://www.apra.gov.au/publications/quarterly-authorised-deposit-taking-institution-performance-statistics.Google Scholar
Austrade. 2017. “Australia's export performance in 2016,” https://www.austrade.gov.au/News/Economic-analysis/australias-export-performance-in-2016.Google Scholar
Baker, Ted, and Nelson, Reed E.. 2005. “Creating something from nothing: resource construction through entrepreneurial bricolage.” Administrative Science Quarterly 50(3), 329–366.Google Scholar
Barney, Jay. 1991. “Firm resources and sustained competitive advantage.” Journal of Management 17(1), 99–120.Google Scholar
Bath, Vivienne. 2017. “Australia and the Asia-Pacific.” In Morosini, Fabio, Badin, Michelle Ratton Sanchez (eds.), Reconceptualizing International Investment Law from the Global South. Cambridge: Cambridge University Press, 146–187.Google Scholar
Breznitz, Dan, and Murphree, Michael. 2011. Run of the Red Queen: Government, Innovation, Globalization, and Economic Growth in China. New Haven, CT: Yale University Press.Google Scholar
Buckley, Peter J., Clegg, Jeremy, Cross, Adam, Liu, Xin, Voss, Hinrich and Zheng, Ping. 2007. “The determinants of Chinese outward foreign direct investment.” Journal of International Business Studies 38(4), 499–518.Google Scholar
Bureau van Dijk. 2019. “ORBIS,” https://www.bvdinfo.com/en-apac/our-products/company-information/international-products/orbis?gclid=EAIaIQobChMIuJ76ksjP5AIVjYBwCh3yTQB2EAAYASAAEgLIk_D_BwE.Google Scholar
Clegg, Jeremy, and Voss, Hinrich. 2014. “Chinese overseas direct investment into the European Union.” In Brown, Kerry (ed.), China and the EU in Context: Insights for Business and Investors. London: Palgrave Macmillan, 14–43.Google Scholar
Deng, Ping, Yang, Xiaohua, Wang, Liang and Doyle, Barry. 2017. “Chinese investment in advanced economies: opportunities and challenges.” Thunderbird International Business Review 59(4), 461–471.Google Scholar
Dougherty, Sean, Herd, Richard and He, Ping. 2007. “Has a private sector emerged in China's industry? Evidence from a quarter of a million Chinese firms.” China Economic Review 18(3), 309–334.Google Scholar
Drysdale, Peter. 2011. “A new look at Chinese FDI in Australia.” China & World Economy 19(4), 54–73.10.1111/j.1749-124X.2011.01250.xCrossRefGoogle Scholar
Drysdale, Peter, and Findlay, Christopher. 2009. “Chinese foreign direct investment.” In Garnaut, Ross, Song, Ligang and Woo, Wing Thye (eds.), China's Place in a World in Crisis. Canberra: ANU E Press, 349–388.Google Scholar
Fan, Di, Cui, Lin, Li, Yi and Zhu, Cherrie. 2016. “Localized learning by emerging multinational enterprises in developed host countries: a fuzzy-set analysis of Chinese foreign direct investment in Australia.” International Business Review 25(1), 187–203.Google Scholar
Fei, Andrew. 2017. “China issues guidelines on overseas investments,” http://www.kwm.com/en/au/knowledge/insights/china-issues-guidelines-overseas-investments-capital-restricted-prohibited-20170821.Google Scholar
Gaetjens, Philip. 2018. “Foreign investment is important for Australia.” Speech given at Chinese Investment and Australia Forum, 8 October 2018, https://treasury.gov.au/speech/chinese-investment-and-australia-forum.Google Scholar
Gonzalez-Vicente, Ruben. 2012. “Mapping Chinese mining investment in Latin America: politics or market?” The China Quarterly 209, 35–58.Google Scholar
Grubel, James. 2012. “China's Huawei vows to become more transparent.” Reuters, 24 October, https://www.reuters.com/article/us-australia-huawei/chinas-huawei-vows-to-become-more-transparent-idUSBRE89N03P20121024.Google Scholar
Huang, Xueli, and Austin, Ian. 2011. Chinese Investment in Australia: Unique Insights from the Mining Industry. Basingstoke: Palgrave Macmillan.10.1057/9780230314153CrossRefGoogle Scholar
Huang, Yiping. 2010. “China's great ascendancy and structural risks: consequences of asymmetric market liberalisation.” Asian-Pacific Economic Literature 24(1), 65–85.Google Scholar
Klossek, Andreas, Linke, Bernd M. and Nippa, Michael. 2012. “Chinese enterprises in Germany: establishment modes and strategies to mitigate the liability of foreignness.” Journal of World Business 47(1), 35–44.Google Scholar
Kogut, Bruce, and Chang, Sea Jin. 1996. “Platform investments and volatile exchange rates: direct investment in the US by Japanese electronic companies.” Review of Economics and Statistics 78(2), 221–232.Google Scholar
KPMG and University of Sydney. 2017. “Demystifying Chinese investment in Australia, May 2017 update,” http://demystifyingchina.com.au/reports/demystifying-chinese-investment-in-australia-2017.pdf.Google Scholar
Levi-Strauss, Claude. 1962. Savage Mind Vol. 1. Chicago: University of Chicago.Google Scholar
Li, Weiwen, He, Ai, Lan, Hailin and Yiu, Daphne. 2012. “Political connections and corporate diversification in emerging economies: evidence from China.” Asia Pacific Journal of Management 29(3), 799–818.Google Scholar
Luo, Yadong, and Child, John. 2015. “A composition-based view of firm growth.” Management and Organization Review 11(3), 379–411.CrossRefGoogle Scholar
Luo, Yadong, and Tung, Rosalie L.. 2007. “International expansion of emerging market enterprises: a springboard perspective.” Journal of International Business Studies 38(4), 481–498.Google Scholar
Ma, Zhaoxu. 2015. Chinese Investment in Australia. Beijing: Renmin University of China Press.Google Scholar
Mathews, John A. 2006. “Dragon multinationals: new players in 21st century globalization.” Asia Pacific Journal of Management 23(1), 5–27.Google Scholar
Maurin, Cristelle, and Yeophantong, Pichamon. 2013. “Going global responsibly? China's strategies towards ‘sustainable’ overseas investments.” Pacific Affairs 86(2), 281–303.Google Scholar
Meunier, Sophie. 2014. “Divide and conquer? China and the cacophony of foreign investment rules in the EU.” Journal of European Public Policy 21(7), 996–1016.Google Scholar
MOFCOM (Ministry of Commerce). 2017. 2016 Statistical Bulletin of China's Outward Foreign Direct Investment. Beijing: China Statistical Press.Google Scholar
Morck, Randall, Yeung, Bernard and Zhao, Minyuan. 2008. “Perspectives on China's outward foreign direct investment.” Journal of International Business Studies 39(3), 337–350.10.1057/palgrave.jibs.8400366CrossRefGoogle Scholar
Naughton, Barry. 2007. The Chinese Economy: Transitions and Growth. Cambridge, MA: MIT Press.Google Scholar
Nee, Victor, and Opper, Sonia. 2012. Capitalism from Below: Markets and Institutional Change in China. Cambridge, MA: Harvard University Press.10.4159/harvard.9780674065390CrossRefGoogle Scholar
Ng, Desmond W. 2007. “A modern resource-based approach to unrelated diversification.” Journal of Management Studies 44(8), 1481–1502.Google Scholar
Nicholas, Stephen, and Purcell, William. 2001. “Japanese subsidiaries in Australia: work practices and learning mechanism.” Singapore Economic Review 46(1), 119–139.CrossRefGoogle Scholar
Nicolas, Françoise. 2014. “China's direct investment in the European Union: challenges and policy responses.” China Economic Journal 7(1), 103–125.Google Scholar
Nitsch, Detlev, Beamish, Paul and Makino, Shige. 1996. “Entry mode and performance of Japanese FDI in Western Europe.” MIR: Management International Review 36(1), 27–43.Google Scholar
North, Douglas C. 1990. “A transaction cost theory of politics.” Journal of Theoretical Politics 2(4), 355–367.Google Scholar
OECD. 2015. OECD Science, Technology and Industry Outlook 2014. Paris: OECD.Google Scholar
Oi, Jean. 1995. “The role of the local state in China's transitional economy.” The China Quarterly 144, 1132–49.Google Scholar
Park, Seung Ho, and Luo, Yadong. 2001. “Guanxi and organizational dynamics: organizational networking in Chinese firms.” Strategic Management Journal 22(5), 455–477.CrossRefGoogle Scholar
Peng, Mike W., and Heath, Peggy S.. 1996. “The growth of the firm in planned economies in transition: institutions, organizations, and strategic choice.” Academy of Management Review 21(2), 492–528.Google Scholar
Powell, Walter W., Koput, Kenneth W. and Smith-Doerr, Laurel. 1996. “Interorganizational collaboration and the locus of innovation: networks of learning in biotechnology.” Administrative Science Quarterly 41(1), 116–145.Google Scholar
Raby, Geoff. 2010. “Australia and China: an iron ore partnership for the future.” Speech at 10th China International Steel and Raw Materials Conference, https://china.embassy.gov.au/files/bjng/100927_Ambassador%20Speech%20at%20Iron%20Ore%20Conference_Final.pdf.Google Scholar
Rhodium. 2017. “Two-way street: 2017 update,” http://cim.rhg.com/reports/two-way-street-2017-update.Google Scholar
Rosen, Dan H., and Hanemann, Thilo. 2013. “Outward FDI from China: dimensions, drivers, implications.” Washington, DC: Peterson Institute for International Economics.Google Scholar
Rugman, Alan M., and Li, Jing. 2007. “Will China's multinationals succeed globally or regionally?” European Management Journal 25(5), 333–343.10.1016/j.emj.2007.07.005CrossRefGoogle Scholar
Sauvant, Karl. P., and Chen, Victor Z.. 2014. “China's regulatory framework for outward foreign direct investment.” China Economic Journal 7(1), 141–163.10.1080/17538963.2013.874072CrossRefGoogle Scholar
Seaman, John, Houtari, Mikko and Otero-Iglesias, Miguel (eds.). 2017. “Chinese investment in Europe: a country-level approach.” European Think-tank Network on China report, http://www.egmontinstitute.be/content/uploads/2017/12/ETNC-Report-2017_complete_FINAL.pdf?type=pdf.Google Scholar
Sutherland, Dylan, and Anderson, John. 2015. “The pitfalls of using foreign direct investment data to measure Chinese multinational enterprise activity.” The China Quarterly 221, 21–48.Google Scholar
Teece, David. J. 2011. “Achieving integration of the business school curriculum using the dynamic capabilities framework.” Journal of Management Development 30(5), 499–518.10.1108/02621711111133019CrossRefGoogle Scholar
Teece, David J., Pisano, Gary and Shuen, Amy. 1997. “Dynamic capabilities and strategic management.” Strategic Management Journal 18(7), 509–533.Google Scholar
UNCTAD (United Nations Conference on Trade and Development). 2017. “World investment report 2017. Investment and the digital economy.” New York: United Nations, https://unctad.org/en/PublicationsLibrary/wir2017_en.pdf.Google Scholar
USCC (US–China Economic and Security Review Commission). 2017. “2017 annual report, chapter 1, section 2 – Chinese investment in the United States,” https://www.uscc.gov/Annual_Reports/2017-annual-report.Google Scholar
Wang, Heng. 2017. “An analytical introduction to ChAFTA: features and challenges.” In Picker, Colin, Wang, Heng and Zhou, Weihuan (eds.), The China–Australia Free Trade Agreement: A 21st Century Model. London: Hart Publishing, 19–44.Google Scholar
Williamson, Oliver E. 2000. “Economic institutions and development: a view from the bottom.” In Kahkonen, Satu and Olson, Mancur (eds.), A New Institutional Approach to Economic Development.” New Delhi: Vistaar Publications, 92–118.Google Scholar
Witt, Michael A., and Lewin, Arie Y.. 2007. “Outward foreign direct investment as escape response to home country institutional constraints.” Journal of International Business Studies 38(4), 579–594.10.1057/palgrave.jibs.8400285CrossRefGoogle Scholar
Wong, Loong. 2012. “The ‘liability of foreignness’: Chinese investment in Australia.” Transnational Corporations Review 4(4), 46–75.Google Scholar
Zahra, Shaker A., Sapienza, Harry J. and Davidsson, Per. 2006. “Entrepreneurship and dynamic capabilities: a review, model and research agenda.” Journal of Management Studies 43(4), 917–955.Google Scholar
Zweig, David, and Bi, Jianhai. 2005. “China's hunt for global energy.” Foreign Affairs 84(5), 25–38.Google Scholar