【正文】 s in the global market and specifies those in major economies. He argues that the advanced economies will keep fighting for their frustrated financial systems in 2020 and their markets will revive unsteadily. Some developing economies may be the gold mines in the global market in 2020, but risks still exist, apparently or potentially. Exporters and investors will have to shun or tackle these risks so that they can benefit from these markets. A senior manager fro m Ernst amp。 Zhan, 1995). During the early years of the reform process, Chinese overseas investments were dominated by large stateowned panies, and key investment decisions, including location of overseas operations, were dictated by political considerations (Hong and Sun, 2020). For example, the decision to invest in Hong Kong ?s infrastructure was aimed at enhancing Chinese influence in what was, at that time, British territory on which China had a claim. By 1992, the ideological debate about the direction of China ?s reform had been resolved, and encouragement of overseas investment by Chinese firms became an established part of the state?s long term strategy. Overseas investment emerged as a tool to gain access to both technology and natural resources. High profile examples of such investments include those made in Indonesian and Algerian oil fields, South African mines, the Brazilian steel industry and the US technology sector. Outward FDI was also aimed at providing Chinese panies access to overseas markets and international brands. Haier, for example, invested in production facilities in the United States to bypass quotas and antidumping measures, while TCL gained access to the Thomson and Alcatel brands. The 199298 period witnessed a cautious implementation of this strategy to go global, but the strategy has been pursued vigorously since 1999. There is a growing literature on the strategic aspects of the trans nationalization process of CMNEs (Sauvant, 2020。s textile and garment exports. The increasing trade barriers and the RMB appreciation will be additional negative factors. Conclusion The Chinese state undertakes large scale investments in a number of countries under the auspices of economic cooperation related investment. While there are suggestions that it is an extension of China’s soft power aimed at facilitating Chinese FDI in those countries, often for access to natural resources, there is no systematic analysis of this in the literature. In this paper, we examine this investment of the Chinese state over time. Our working hypothesis is that China’s ECI is used to facilitate outward FDI, especially to countries that are rich in natural resources. Hence, we use as the basis for our empirical exercise the gravity model that is used in the stylized literature to examine the direction of investment flows. In our empirical specification, we also control for institutional quality and political characteristics of the ECI recipient countries, to account for the popular wisdom that the Chinese state (and firms) often does business with countries where political rights and institutional quality are weak. Our results suggest that the pattern of investment is indeed explained well by factors that are used in the stylized literature to explain directional patterns of outward FDI. They also demonstrate that while there is some support for the popular wisdom that China’s willingness to do business with a country is not strongly affected by its level of corruption, there is much weaker support, if any, for the hypotheses that China favors doing business with countries where political rights are limited. Similarly, whereas the regression results suggest that China’s ECI is indeed positively related to the natural resource richness of the recipient countries, the relationship is not economically meaningful. Further, while energy richness of the recipient countries influenced ECI more during the niies, in the current decade the emphasis seems to have shifted to nonenergy minerals. Aside from the political economic implications for Chinese ECI and the country’s outward investment, in order to successfully internationalize using outward FDI, it may be important (even imperative) for aspiring firms to maintain linkages with their respective governments. Since relationships are developed over time, older and well established firms are more likely to be able to leverage the state’s help than relatively new firms. Further, an alliance between the state and firms aspiring to internationalize might require a greater alignment of their interests, such that government support is more likely to be provided to firms that operate in industries like natural gas and oil that involve the strategic interests of the state. Finally, such alliance might be useful only if the government itself has sufficient soft or hard power to facilitate the internationalization process of domestic firms. To the extent that the state’s support is critical in the internationalization process, therefore, firms from relatively weak countries that cannot project power but may be part of regional alliances are more likely to internationalize regionally, while firms from larger and more powerful emerg