Chinese multinationals on the New Silk Route: Managing political risk by branding the nation

Abstract

Though Chinese multinational enterprises (CMNEs) have brought investment and opportunities to countries along the Belt and Road Initiative, there has been scepticism regarding the content and context of their investment. On the one hand, infrastructural development contributes to GDP formation and enhances the efficiency of productive inputs where international trade enhances technology and export development, which jointly provides a path to economic growth. On the other hand, critical issues such as debt sustainability and national sovereignty among countries that have gone through the decolonization process mean that CMNEs need to grasp the implication of political risk when investing. This article focuses on South and Southeast Asia, where China has historical socio-economic relationship, and proposes a nation branding model combining tradition and modernity which can be the way forward for CMNEs to mitigate political risk in relation to the Belt and Road Initiative (BRI) investment. Nation branding of BRI could be seen as a continuity of China's unfinished business in globalization that has preceded the modern polity; nevertheless, there is a need to communicate a coherent and authentic message that reflects the reality of business operations.