Chinese overseas investment flows during the past 30 years can be divided into three distinct phases.

Phase 1, 1979–1990, initiation During this phase, China emerged from the political impacts of the Cultural Revolution and reformulated its national development strategy to focus on developing and modernising the economy (Voss et al. 2008). Although increasing market liberalisation and encouragement of private enterprise characterised the 1980s and 1990s, within the general rubric of the ‘socialist market economy’ reform process, most companies continued to operate within the framework of the state economic planning system and their activities were restricted by government regulations. The...

A number of central government administrative departments in China are responsible for formal policymaking. A compilation of policies on overseas investment and an analysis of the agencies responsible for issuing these policies indicate that 26 central government agencies have been involved in the policymaking process.

These central government agencies can be classified into four general levels (Figure 2). The top decision-making agency is the State Council, which is responsible for overall management of China’s government and significant decisions affecting the economy and society. The second level is made up of the core ministry-level agencies involved in overseas investment management: the...

The frequency with which China’s overseas investment policies are issued and their strategic direction have varied over time. In the first two stages, from 1979 to 2001, the frequency of new policies was low, at around four per year. The economic planning system led to restrictive management processes and a lack of investment resources, resulting in very limited investment activities. However, overseas investment gradually became a greater focus in the national economy, and China formally developed its strategy of Going Out. Since this strategy was announced in 2000, OFDI-related policies have been issued more frequently – increasing to more than...

This paper has summarised the overseas investment policy system in China, a system that has undergone major transitions in the past 30 years. At the beginning of the ‘reform and opening up’ period, initial attempts to undertake overseas investment helped to lay the foundations for China’s OFDI management system. In the outward foreign trade-oriented period of the 1990s, restrictive policies limited the development of OFDI to some degree. With the advance of the wider reform process, and the concomitant adjustments to the economy, a strategy of prioritising support for overseas investment was ultimately established. The recent and current policy environment...