China's outward FDI and resource-seeking strategy : a case study on Chinalco and Rio Tinto.

Abstract

The scale and frequency of foreign direct investment (FDI) in foreign mining companies by China's large state-owned enterprises (SOEs) is still not well explained by existing investment or international business theories. This paper advances and verifies two important theoretical propositions. First, the efforts of China's big businesses to "go global" can be thought of as being part of a national power-building globalisation strategy. Second, facilitated by extended protection from the state, reaching beyond China's national boundaries, China's large SOEs raise investment capital and take risks that their foreign competitors do not. This paper uses Chinalco as a case study to illustrate these propositions.