Suchergebnisse

This paper examines the effect of bilateral investment treaties (BITs) in promoting Chinese outward foreign direct investment (COFDI) in the presence of rising economic policy uncertainty in China's partner countries. We postulate that the signing of BITs should help stimulate COFDI
because the treaties send a credible signal to foreign investors about the host country's intent to protect Chinese investment, and make it more difficult for the host country to violate its treaty obligations. BITs that contain rigorous investment protection and liberalization provisions,
in particular, should be more likely to encourage COFDI as they directly influence Chinese investors' expectations about the stability, predictability, and security of the host market. However, while BITs generally promote COFDI, host country economic policy uncertainty may also limit their
effectiveness. This is because uncertainty tends to undermine investor confidence, trigger capital flows from high- to low-risk countries, and dampen commercial activities. Poisson pseudo-maximum likelihood (PPML) estimation models of the determinants of COFDI to 188 countries between 2003
and 2017 lend substantial support to our conjectures.

Since 2000, China's outward foreign direct investment has grown rapidly due to the government strongly encouraging Chinese enterprises to "go global". Thus far, the bulk of the investment has gone into the primary and tertiary sectors, with relatively little going into manufacturing. Most investments are concentrated in Asia, but they are now spreading throughout the world. Much of it passes through tax havens. The government has been slow to tackle administrative obstacles facing Chinese companies wishing to invest abroad. However, the global financial crisis has presented opportunities for Chinese multinationals to raise their stake in the world economy. (CIJ/GIGA)