Since it adopted an open-door policy and launched economic reforms in 1978, China has experienced spectacular growth in its GDP and exports. China has become the world’s largest exporter since 2009 and its exports have grown much faster than imports, resulting in a huge trade surplus over the years. Meanwhile, China has also been one of the largest recipients of foreign direct investment (FDI) in the world. Its experience with exports and FDI undoubtedly has important implications for other developing countries. Rapid growth in China’s exports appears to have been due to its increasing involvement in processing trade, which is facilitated by FDI. Trade intermediaries and indirect export through Hong Kong also seem to have played an important role in this process. Intermediary firms play an important role in international trade, especially in Asian developing countries, and recent research in international trade has begun to examine the role of intermediary firms in export expansion. The chapter provides an updated picture of China’s exports and FDI by surveying the most recent research on this topic. It also identifies the challenges China faces, and explores the policy implications.
Jing Zhang and Xufei Zhang
Andrei Levchenko and Jing Zhang
Jianwei Zhang and Yijia Jing
Kei-Mu Yi, Michael Sposi and Jing Zhang
Kei-Mu Yi, Michael Sposi and Jing Zhang
Klaus E. Meyer, Yuan Ding, Jing Li and Hua Zhang
State-owned (SO) enterprises are subject to more complex institutional pressures in host countries than private firms. These institutional pressures arise from a weak legitimacy of “state ownership” in some countries, which arises from a combination of ideological conflicts, perceived threats to national security, and claimed unfair competitive advantage due to support by the home country government. These institutional pressures directed specifically at SO firms induce them to adapt their foreign entry strategies to reduce potential conflicts and to enhance their legitimacy. Testing hypotheses derived from this theoretical argument for subsidiaries of listed Chinese firms, we find that SO firms adapt mode and control decisions differently from private firms to the conditions in host countries, and these differences are larger where pressures for legitimacy on SO firms are stronger. These findings not only extend institutional theory to better explain differential effects on different entrants to an organizational field, but demonstrate how foreign investors of idiosyncratic origins may proactively build legitimacy in host societies.
Jing Li, Klaus E. Meyer, Hua Zhang and Yuan Ding
Firms and governments operate in broad networks in which the home government and its diplomatic service are a critical node – or a ‘‘referral point’’ – between firms and potential partners in foreign locations. Thus diplomatic relations between countries matter for the choice of foreign investment location. Using a network perspective, we argue that the extent to which good diplomatic relations induce firms to invest in friendly host countries depends on their political connections to home governments. Those with stronger ties to home governments can better access and leverage intergovernmental diplomatic connections, thus benefiting potentially from enhanced access to information, reduced political risks, and increased legitimacy. Such ability of politically connected firms is more useful where weak institutional impartiality in the host country inhibits neutral treatment of foreign investors. Empirically, using overseas investment location decisions by Chinese firms, we find that the types of home government ties (i.e., whether they are organizational or personal and whether those relationships are with central or local governments) and the impartiality of host institutions are both important contingencies affecting firms’ utilization of diplomatic relations. We discuss the implications of our study to research on network theory, political ties, and internationalization of emerging market firms.
Jane Addison, Colin G. Brown, Enkh-Orchlon Lkhagvadorj, Zhang Jing, Scott Waldron, Zhang Bao and Duinkherjav Bukhbat
Formal and informal institutions impacting upon grassland use and management in China and Mongolia are set out and compared in the chapter. This includes a discussion of current policy instruments and evolution of these policies. Economic and other societal macrodevelopments that have influenced the behaviour of grassland actors are also outlined and compared.