Please use this identifier to cite or link to this item: http://hdl.handle.net/1946/14799
A debate has been on-going among the countries of Europe and North-America regarding the costs and benefits of foreign direct investment originating in China. While some policy-makers and members of the public welcome the much-needed infusion of finance and the employment it creates during these times of economic depression, others perceive it as not only being made with commercial interests in mind, but rather as a part of a larger strategy by China aimed at gaining a strategic foothold in the region.
This thesis examines whether the trend of increased foreign direct investment by Chinese business entities in the West poses a threat to the national security of the host countries. Mercantilist theories from the field of international trade will be applied in order to explain the key drivers behind the recent influx of Chinese outward foreign direct investment as well as developments in China´s official OFDI policy. Western public and official reactions to the phenomenon will be explained utilizing the theory of political realism from the field of international relations as well as the ‘securitization’ concept. Finally, Barry Buzan´s definition of security will be applied in order to determine whether and what kind of threats Chinese foreign direct investment poses to the security of Western states.
The thesis concludes that the phenomenon of foreign direct investment originating in China does not pose an imminent threat to the military security of the host countries nor their allies. On the contrary, it seems that the strategic threat posed by increased Chinese investments in the West is overstated by the Western public as well as some governments. Chinese foreign direct investment certainly poses challenges to some aspects of the security of Western states but these do not include hard national security threats. The obvious question arising is whether and how Chinese behaviour may be modified to reduce those risks that do exist
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