Abstract:
Ever since the beginning of the 21st Century, the development of China’s outward foreign direct investment (FDI) started to boom. As a contributor of outward FDI flow, China occupied the largest share among developing countries in 2004 and then became the third largest FDI source-nation in the world. This research concentrates on Chinese outward FDI in the New Zealand dairy industry. The aim is to understand and evaluate the entry strategies for Chinese dairy multinational enterprises (MNEs) in New Zealand based on their motivations and performance. A multiple case study approach is adopted to achieve the research objective. Four Chinese MNEs: Bright Dairy, Shanghai Pengxin, Yashili and Yili are selected for this study. A number of motivations for undertaking FDI are discovered, such as China’s weak competitiveness particularly in dairy production costs and operational expertise as well as pressure from foreign dairy companies, especially in China’s infant formula milk powder market. The study also demonstrates that the four selected companies lack international operating experience when undertaking FDI in the New Zealand dairy industry. Thus, they rely on experienced New Zealand contractors and employees. Implications for Chinese dairy enterprises, their home country, and New Zealand as a host country are offered.
