Who damages whom? Chinese firms' outward investment and the international reputation of China's economic system

“A group of "princelings", children of China's political elite, has quietly urged the Communist
Party leadership to release jailed Nobel laureate Liu Xiaobo on parole to improve the
country's international image”1 .
The news revealed by the Reuters press agency, if confirmed, adds a key element to the inside
élite's debate on the country's reputation and its link with the high failure rate of overseas
direct investments (ODI). Starting from December 2012, the Chinese perspective on its own
outward investment experience has indeed undergone a change. Two elements, in particular,
have prompted this change: a preliminary estimate of the “failure rate” of Chinese
multinational investment and the gradual but relentless erosion of the country’s firm belief
that developing countries would have extended a warm welcome to Chinese investments. The
origin of the troubles faced by ODI has indeed become a top issue for State party officials,
enterprise CEOs and economists as well. The emergence of divergent perspectives suggests
that the block of interests that has often been identified behind Chinese investment is less homogeneous than it appears.