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One could say that the size of Foreign Direct Investments (FDIs) as well as the size of Outward Foreign Direct Investment (OFDI) are some of the main indictors of a state’s economic situation as well as economic rank worldwide. Indeed, such indicators would also allow to determine a state’s soft power and its position in terms of influence in the international relations field. Other indicators include elements such as the importance of the national currency in the world. For instance, the currency of the United States (US) represents one of the many components of the US soft power as it is adopted as an exchange currency after world war II in the global sphere. In the Chapter Law, Culture, and the Politics of Chinese Outward Foreign Investment, the author Valentina Sara Vadi explores the current influence of the Chinese state in international relations on the basis of its economic powers. As such, the author examined the existing FDIs as well as OFDI of the country and the level of support that these elements are getting from the government. The author aimed through this analysis to determine the current state of Chinese soft powers in the world using economic indicators which were employed by the state to further expand such powers in a strategic manner. In fact, China is one of the leading sources of FDI. When it comes to OFDI, the government initially focused on the “development of natural resources to cover infrastructure, the mining industry, manufacturing, finance, agriculture, forestry, and more.” The major Chinese OFDIs are in Asia. Latin America has the second position however with a much lower percentage. Africa and Europe receive also a smaller share than the one of Latin America while North America and Oceania receive the smallest share of all the regions. The majority of companies working abroad are State Owned Enterprises (SOEs). However, the private sector is slowly starting to play a role in this field. Through the SOEs, the government provides several incentives to the host country such as aid, debt relief, and other forms of development assistance in order to persuade the host country of signing agreements with these SOEs. These agreements usually take the form of Bilateral Investment Treaties (BITs). This reality led to granting these SOEs competitive advantages over Multinational Companies (MNCs) competing for the same opportunity as a result of the support of the Chinese state to these SOEs. In fact, Beijing is using these SOEs to also advance its political agenda worldwide as the countries in which Chinese SOEs are operating do not possess the same bargaining power as the People’s Republic of China (PRC). This situation led to the emergence of new concerns related to the potential impact of these operations on several non economic values in the host country such as the environment, human rights, cultural heritage and so on. As such, it would be very interesting to observe the future development of the relations between the host countries and Chinese SOEs and the role of the Chinese government in this regard.
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