Chinese companies value political stability in the countries where they invest. They also realize that stability often is the opposite of opportunity. As they are newcomers to the world stage, Chinese companies tend to accept that political stability may not necessarily be a given in places where they invest, and they have to learn to deal with it. In the meantime, negative publicity and perceptions are bound to arise, as will investment failures and even disasters.

To a large extent, the success of Chinese companies’ ODI will be defined not by how much profit they make, but by their ability to manage negativity and grow harmoniously with the local community.

Assuming China’s promised political and market reforms are enacted, such as reforms to curb corruption, company and consumer confidence should return. Once confidence regains its momentum, more Chinese companies should be willing to consider ODI. However, the strength of this momentum will depend largely on whether the reforms are perceived as adequately addressing market inefficiencies.