The Strategic Implications of Chinese Companies Going Global
Abstract
China's overseas direct investment (ODI) has become one of the biggest economic stories of the 21st century. In a relatively short time span, China has become the number one overseas investor amongst developing countries as well as the world's sixth largest overseas investor overall with $150 billion invested in foreign markets. This marks a development of strategic significance with implications that go beyond simple economics. Through economic reforms put into place over three decades ago, China has been propelled to the epicenter of the global economy after an absence of several centuries. On December 18, 1978, the 11th Central Committee of the Chinese Communist Party voted to enact significant economic reforms argued for by leader Deng Xiaoping. According to Chinese President Hu Jintao, Deng's decision for reform was a great awakening of the Communist Party. Deng had recognized after the chaos of the Cultural Revolution that if China was to re-establish its economy, build its national power, and return to its rightful place in the sun, then major reforms were required. He further stated that China should follow a strategy of opening to the outside world. Deng advocated that through reform and opening up, China would gain access to international capital, management skills, technology, and markets. These first steps led to China surpassing Germany to become the world's number one exporter, surpassing Japan to become the world's second largest economy overall, and becoming the world's largest consumer of energy ahead of the United States. China's economy has grown by a factor of seven in the past 20 years, faster than the United States and Japan grew during their early stages of economic development. It took Japan 25 years to grow six times during the period 1960-1985 while the United States needed over 60 years to grow 3.5 times from 1870 to 1930.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2012
- Accession Number
- ADA570470
Entities
People
- Heino Klinck