On the global COVID-19 pandemic and China's FDI

Jing Fang; Alan Collins; Shujie Yao

doi:10.1016/j.asieco.2021.101300

On the global COVID-19 pandemic and China's FDI

J Asian Econ. 2021 Jun:74:101300. doi: 10.1016/j.asieco.2021.101300. Epub 2021 Mar 18.

Authors

Jing Fang¹, Alan Collins², Shujie Yao^{1

3}

Affiliations

¹ School of Economics and Business Administration, Chongqing University, Chongqing, China.
² Department of Economics, Nottingham Trent University, Nottingham, UK.
³ Business School, University of Nottingham (Ningbo), Ningbo, Zhejiang, China.

Abstract

The global COVID-19 pandemic has generated serious challenges for the world economy, including cross-border foreign direct investment (FDI). China's inward FDI (IFDI) and outward FDI (OFDI) are also facing unprecedented risks and challenges. This paper first clarifies the timelines of the pandemic evolving in China, the US, and the rest of the world. It then reflects on China's past development process of IFDI and OFDI, noting the growth of IFDI and highlighting the risks and challenges for OFDI during and after the pandemic. Empirical evidence for the impact of COVID-19 on FDI is set out. Policy recommendations are then made regarding China's latest development strategy using the so-called dual circulation to sustain its economic growth with respect to cross-border FDI.

Keywords: COVID-19; China; Dual circulation; FDI; OFDI.