The overview of current situation and intent of Chinese outward FDI in Finland

Abstract

This study aims to identify the key factors that may act as motives or obstacles for bringing Chinese foreign direct investment to Finland, as well as services provided and needed for promoting and assisting investment from China to Finland. China will be studied as an investor and Finland especially Southern Finland will be evaluated as an investment destination. In the academic literature, foreign direct investments have been deeply and broadly studied all over the world. With the astonishing development of Chinese economy, its rapidly increased international investment has drawn much more attention globally. However, Chinese investment in small nations such as Finland or other northern countries is rather a fresh topic. What’s more important, previous empirical studies have not provided a clear picture of host country determinants of Chinese FDI in small developed countries such as Finland. Recently, Chinese companies are generally showing greater and stronger interest in Finland. Thus a better understanding of the current situation and intent of Chinese outward foreign direct investments in Finland has become a more important issue. This study seeks to provide the key elements behind Chinese foreign direct investment to Finland, especially southwest Finland.

The literature review was supported by both primary data and secondary sources. The primary data has been gathered through reports, emails and some government publications. The secondary sources have been journals, books, newspapers and statistics, among others. The research was conducted by both qualitative and quantitative methods: questionnaire designed for Chinese respondents, semi-structured and in-depth interview for Finnish respondents. Altogether 18 responses were received, 12 for questionnaires, 6 for interviews.

There are various findings of the research. The Chinese respondents appeared to be optimistic about Finland’s investment environment and the Finnish responding enterprises showed positive attitude towards Chinese investment too. The study also reveals some positive motives for and obstacles of attracting Chinese FDI to Finland. Moreover, culture turns out to be a potential obstacle factor that Finland is lack of knowledge about Chinese investors and China has inadequate information about Finland’s investment environment. Finally, the study concludes that Finland lacks promotion and publicity in China, therefore, increasing promotions and publicity in China and improving Sino-Finnish FDI services are needed, in which further study is strongly recommended.