The role of overseas Chinese investment in the emerging countries of Southeast and East Asia: A Confucian model of the foreign direct investment decision-making process using factors unconsidered in the West

The purpose of this study was to gain a better understanding of the foreign direct investment location decision making process through the examination of non-Western investors and their investment strategies in non-traditional markets. This was accomplished through in-depth personal interviews with 50 Overseas Chinese business owners and executives in several different industries from Hong Kong, Singapore, Taiwan, Malaysia, and Thailand about 97 separate investment projects in Southeast and East Asia, including The Philippines, Malaysia, Hong Kong, Singapore, Vietnam, India, Pakistan, South Korea, Australia, Indonesia, Cambodia, Thailand, Burma, Taiwan, and Mainland China.^ Traditional factors utilized in Western models of the foreign direct investment decision making process are reviewed, as well as literature on Asian management systems and the current state of business practices in emerging countries of Southeast and East Asia. Because of the lack of institutionalization in these markets and the strong influences of Confucian and patriarchal value systems on the Overseas Chinese, it was suspected that while some aspects of Western rational economic models of foreign direct investment are utilized, these models are insufficient in this context, and thus are not fully generalizable to the unique conditions of the Overseas Chinese business network in the region without further modification.^ Thus, other factors based on a Confucian value system need to be integrated into these models. Results from the analysis of structured interviews suggest Overseas Chinese businesses rely more heavily on their network and traditional Confucian values than rational economic factors when making their foreign direct investment location decisions in emerging countries in Asia. This effect is moderated by the firm's industry and the age of the firm's owners. ^

China's Building of a Blue-Water Fleet

In recent years the People’s Republic of China has begun to exhibit a more aggressive naval policy as a result of its decision to switch its naval force from a primarily green-water fleet (coastal) to a blue-water fleet (expeditionary) (“China’s New,” n.d.). This decision has brought China to loggerheads not only with other local East and South Asian powers such as India and Japan, but also with the predominant blue-water power of the world, the United States, that sees its supremacy threatened (“When Grand,” n.d.). Why would China embark on a route that would pit it against the world naval superpower, the United States, which has a huge lead on China in terms of naval blue-water power? Why would China try to challenge and match the U.S. Navy’s eleven aircraft carriers (“The World’s,” n.d.)? What could compel China to embark on a plan that would so disrupt the balance of power in the waters around Asia? To fully understand the Chinese government’s decision, one must first look at Chinese import figures and Chinese trade routes.