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This article investigates the effects of US sanctions on Chinese public and private overseas foreign direct investment (FDI). Using data for up to 112 developing countries from 2005 to 2015, we find that Chinese state-owned enterprises (SOEs) are more likely to invest in countries threatened or targeted with US sanctions relative to Chinese privately owned enterprises (POEs) because they have the Chinese government's backing and are larger in number and size, motivating them to invest in higher-risk states. The Chinese government also reaps political benefits by Chinese SOEs investing abroad, enhancing China's economic strength and decreasing its rivals' influence. We obtain similar results for Chinese SOEs and POEs regardless of the investment sector and conduct additional robustness checks that further reinforce the main findings. Our study provides insights into how China's overseas FDI increases its economic and political reach across the globe at the possible expense of the United States. [ABSTRACT FROM AUTHOR]

Although recently Chinese investment in the USA has grown exponentially, it has not flowed equally among the US states. Controlling for popular explanations in the foreign direct investment literature, we carry out subnational analysis to assess the determinants of Chinese investment in the USA. Using a panel dataset for all states from 2006 to 2016, we find that Chinese firms are more attracted to states where Republican governors hold office. Republican-governed states particularly attract greenfield investments from Chinese firms. However, we also find that US national security concerns and Chinese goals appear to affect investment flows in high-technology states, limiting the role of partisanship. Our results indicate that it is too soon to dismiss the importance of politics on foreign direct investment. [ABSTRACT FROM AUTHOR]

I built a political economy model to empirically explore the factors that could contribute to the cooperation between adversarial dyads, with special focus on the dyadic trade, dyadic FDI and their interaction. I use US-China relationship as a case study and investigate whether/how the tensions in the trade relationship between the US and China could strengthen or weaken the pacifying effect of bilateral FDI between the adversarial dyad. To empirically test my theory, I use historical data on all the adversarial dyads in the world from year 1980 to 2001 and empirically tested whether/how trade and FDI and their interactions influence adversarial states' cooperation. I found that, with the decrease of bilateral trade, the pacifying effect of bilateral FDI strengthens for the adversarial dyads and weakens for non-adversarial dyads. I connect this with the current US-China trade war. I argue for an important role of the local governments and lobbying groups in the US in attracting Chinese FDI and promoting interstate cooperation. As bilateral FDI has become a shared constituency for the adversarial dyads, I further claim that FDI has a strong pacifying effect on the US-China cooperation in the context of trade war. [ABSTRACT FROM AUTHOR]