Chinese outward foreign direct investment : a case study of the financial services industry, 2002-2018

Abstract

Significant research has been conducted relating to Chinese outward foreign direct investment; however, not much investigation has occurred regarding the phenomenon within specific industrial sectors, particularly the tertiary sector. Based on data from China’s Ministry of Commerce and several multinational Chinese banks, this paper attempts to discover trends regarding Chinese overseas investment from a sector which is fast-growing domestically: financial and advanced business services. Advanced business services comprises industries such as banking, accountancy, insurance, logistics, consultancy, HR, high-level recruiting and law, and these industries are expanding within China as the nation moves toward becoming a tertiary-dominated economy. This study utilises data from a study area of Hong Kong, the European Union, the United States, ASEAN, Australia, and Russia in order to advance the research in a regional setting. To analyse current trends, both quantitative and qualitative research methods are utilised. The empirical findings suggest that Chinese outward foreign direct investment in financial and advanced business services is centred upon the financial centres of Hong Kong, the European Union, and the United States. However, the study finds no connection between trends in outward foreign direct investment data and trends in the studied bank’s asset growth. By categorising terminology on banks’ websites, it is purported that by far the largest motivation for Chinese banks moving abroad is to create a worldwide network with which to service their global customers. Moving forward, the work of this pilot study should be further complemented by quantitative questionnaire-oriented studies supplemented by qualitative methods to further investigate the fascinating and ever-changing nature of Chinese outward foreign direct investment.