China’s Investment in Belt and Road Countries: An Industrial Perspective

Abstract

China’s “Going out Strategy” was initiated in the 1990s, which motivated the Chinese enterprises to extend oversea market, upgrade technologies, and obtain strategic resources. Since then, the Chinese outward foreign direct investment (OFDI) has grown significantly. Starting from the 11th Five-Year Plan, the Chinese government started to establish “Overseas Economic and Trade Cooperation Zones (OETCZs)” in resource-rich (human, raw materials, etc.) and logistically essential countries to attract domestic investors. After the 18th National Congress of the Chinese Communist Party (CCP), China furtherly announced the “One Belt One Road (OBOR)” Initiative, aiming to enhance infrastructure connectivity, deepen economic and trade cooperation, promote cultural exchange, and increase financial integration among China and the belt-road countries. OETCZs are more industrial and investment oriented while OBOR is a comprehensive strategy covering trade, investment, culture, politics, and other aspects. Although the OETCZs were established almost ten years earlier than the announcement of the OBOR initiative, many of them are located in the belt-road countries. Therefore, how the existing OETCZs affect China’s OFDI in the belt-road countries after the initiation of OBOR is the main focus in this study.