Outward FDI from China and India

Amiya Kumar Bagchi and Anthony P. D’Costa

in Transformation and Development

Published in print November 2012 | ISBN: 9780198082286
Published online January 2013 | e-ISBN: 9780199082377 | DOI:
Outward FDI from China and India

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This chapter describes the broad dimensions of the outward foreign direct investment (OFDI) from India and China, focusing on their motivations and their implications for their respective economies. The first section describes the main trends in OFDI from China and India. The second section interprets the trends in terms of their development strategies and national economic performance. Discerning the similarities and differences in the pattern of outward flows, the last section summarizes and concludes the main findings of the study. The majority of China's capital flows out to tax havens (principally to Hong Kong) where it operates sovereign wealth funds to support its firms. In contrast, most of the outward investment from India is used to acquire factories and firms in the developed economies, to access markets, and to acquire technologies to enhance domestic capabilities.

Keywords: foreign direct investments comparisons; Chinese economic policy; Indian economic policy; development strategies; Chinese sovereign wealth funds; Indian outward investment; access to markets; technology acquisition; tax havens; acquisitions

Chapter.  7609 words.  Illustrated.

Subjects: Comparative Politics

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