Determinants of Chinese investments within the EU

Abstract: Since opening up their economy Chinese ODIs has started to be a large part of the country’s economic development. In recent years the share of ODI from China into the EU has increased dramatically. In this paper, an empirical estimation on the determinants of Chinese ODIs in EU is made. The date used for calculations are collected from different databases at the World Bank as well as at the Ministry of Commerce of the People's Republic of China. The results indicate that Chinese investors focus on Europe as an investing opportunity of two reasons. Firstly, investments are made in order to increase efficiency of firms and production. Secondly, as Europe is relatively large market the opportunities for increased market share seems to be an important indicator.