Fleeing the Great Game: Why Are Chinese Companies Going Global?

Beginning in the late 1990s, headlines about massive investments in China by Western multinational companies became an everyday occurrence. “Procter & Gamble will invest $1 billion in China,” “The Coca-Cola Company plans to invest $4 billion in China over the next three years,” and “Cisco is placing a $16 billion bet on the China market” are just a few examples. China was quickly becoming the world’s largest recipient of foreign direct investment (FDI) under new reform and opening efforts known collectively as its qing jinlai (请进来) “please come in” policy. Chinese firms competed fiercely among themselves and with their new Western competitors to establish themselves as market leaders in their respective industries. At the same time, China adopted a new stance on overseas direct investment (ODI) expressed as zou chuqu (走出去) “go out,” The “go out” policy, announced in 1999 by the Central Committee of the Chinese Communist Party and formally initiated in October 2000, encourages and supports Chinese companies to invest overseas through incentives and subsidies as well as liberalization of regulatory systems and administrative rules. Chinese government officials commonly use both phrases together 1 when discussing China’s development strategy as qing jinlai, zou chuqu (请进来,走出去): the government both welcomes foreign companies in to China while encouraging its own firms to “go out.” These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.