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A comparative analysis of the role of the state in Chinese, Japanese, and Korean investment in the EU

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Abstract

Chinese outward foreign direct investment (COFDI) in the European Union (EU) has recently attracted much attention. However, we cannot thoroughly understand the case of COFDI in the EU unless we compare it with other countries’ foreign direct investment (FDI). Japanese and Korean firms, including the keiretsu, and chaebol, are also quite active worldwide, including in the EU. The East Asian countries mirror the global power shift to the Asia Pacific and the challenges the EU faces concerning this development. This article examines the home state’s role in each of the three East Asian countries by focusing on how the Japanese, Korean and Chinese states supported their respective firms’ investments into the EU. It shows that COFDI in the EU substantially differs from its Asian counterparts due to its state-firm link, including ownership, policy support, and subsidies. Beijing also differs from Tokyo and Seoul because of its economic statecraft.

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Notes

  1. Private Chinese firms are also connected to the Chinese government, for instance, due to the need to obtain permission to go abroad. It is not easy for Chinese private enterprises to invest abroad because of currency firewall issues.

  2. In 2020, the Party issued a framework strengthening the influence over the private economy and support the private sector (People’s Daily 2020; Xinhua 2020).

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Acknowledgements

The author is grateful to the anonymous reviewers and Asia Europe Journal editor Shen Wei for their invaluable remarks and support.

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  1. School of Advanced International and Area Studies, East China Normal University, A406 Science Building, No. 3663, Zhongshan Road N., Shanghai, 200062, China

    Bas Hooijmaaijers

  2. Leuven International and European Studies (LINES) Institute, KU Leuven, Leuven, Belgium

    Bas Hooijmaaijers

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Hooijmaaijers, B. A comparative analysis of the role of the state in Chinese, Japanese, and Korean investment in the EU. Asia Eur J 19, 427–444 (2021). https://doi.org/10.1007/s10308-021-00610-w

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