Southeast Asia as a Window into the Effects of Chinese Outward FDI

This chapter represents the introduction to The Effects of Chinese FDI in Southeast Asia (Routledge, 2026).  The impact of outward foreign direct investment (FDI) from the People’s Republic of China has been discussed for decades with substantial attention given to the effects of Chinese outward FDI (OFDI) in Southeast Asia (SEA).  Past analyses, though, suffer from numerous shortcomings.  This chapter supplies a primer on Chinese OFDI (COFDI) in SEA by highlighting some key patterns and COFDI drivers.  Furthermore, it reviews assessments of COFDI’s effects.  Key book findings are that COFDI has the potential to create large numbers of jobs, rarely generates substantive technology transfer, and frequently is associated with negative domestic political externalities.  The chapter stresses the need for observers to be more nuanced and emphasizes host countries, China, and Chinese companies need to do much more to realize COFDI’s full potential.  More information about the book can be found at https://www.routledge.com/The-Effects-of-Chinese-FDI-in-Southeast-Asia-Cheer-Commonsense-and-Clarification-Along-the-Belt-and-Road/Blanchard/p/book/9781041066002.