The aim of this study is to, from a critical perspective of international relations (IRs), explain the seemingly puzzling warm receptivity to Chinese investment in Hungary compared to many fellow European countries. In so doing, the study illustrates how to “endogenize” IR factors in International Business (IB) research.
The study serves to provide a fresh perspective, particularly regarding “endogenizing” IRs factors in the study of receptivity to foreign direct investment (FDI). It focuses on receptivity to Chinese investment in Hungary and draws upon qualitative interviews with senior government officials, advisors, academics and business representatives who are directly involved in or have profound knowledge about Chinese investment.
The study identifies that, situating in a semi-periphery country, policy elites under the Orbán Government in Hungary had a unique assessment of opportunities and risks associated with Chinese investment. In contrast to the tendency in the core countries to perceive Chinese investment as presenting high security, economic and political risks, the Orbán Government were not keen for security framing as they did not see much strategic assets to protect; neither did they have much political concern about Chinese FDI. Instead, their focus seemed to be on reaping the economic benefits of FDI and reducing its dependence on the German economy and (traditional) automotive industry.
The analysis suggests that it does not make sense to have a one-size-fits-all de-risking approach to China and Chinese FDI. Instead, countries should consider their own circumstances, including IRs and their positions in the network of international systems. A nuanced understanding of the differences between the core, the periphery and the semi-periphery can enrich academic debates and policy choices regarding the future of global FDI flows.
The study offers a fresh perspective of host country receptivity to foreign investment, foregrounding IRs factors in IB research.
