Chinese multinationals and public policy

The purpose of this paper is to examine the interaction between large Chinese firms as they internationalize and their home and host governments.

The approach taken is that of an analysis of relevant literature and the application of a popular theoretical framework by Rugman and Verbeke to the case of Chinese firms as they expand abroad.

First, the paper adapts a well-known business-government framework to analyze emerging economy issues, all in a Chinese context. Then the paper relates this analysis to the existing literature on the international expansion process of Chinese firms. The paper finds that in their attempt to seek strategic assets, Chinese multinational enterprises (MNEs) face conflicts with host countries and Western firms in which host government support for international competitiveness can be used as quasi protectionist defense mechanisms. Using the public policy and MNE framework, the paper examines several recent disputes and finds that Chinese MNEs have complementary goals with the Chinese state, but they have conflicting goals with Western governments.

These findings have important academic research, managerial, and public policy implications.