Chinese investment in the transition countries

This paper examines the pattern and magnitude of China’s outward foreign direct investment (FDI) to the EBRD’s countries of operations. We first analyse the recent trends of China’s outward FDI, with sectoral and geographical distributions, and assess the implications for the transition countries. The paper then looks at the characteristics and activities of Chinese multinational enterprises and assesses their key motives for investing in the transition region. The paper also examines the key determinants of China’s outward FDI and indicates the future prospects based on the regression model. China’s FDI outflows and its stock are forecast to increase substantially during the next decade and for the transition countries, China is expected to play a larger role as an investor.