Challenges that go beyond the economic impact

First, the
interwoven relationships between government and busi –
ness in China are significantly more knotted than those in
the West (Heilmann 2016: 220-222). The interests pursued
by Chinese companies with their foreign investments are
often congruent with the industrial policy goals of the Chi –
nese government and vice versa. Formal ownership struc-
tures only give a partial glimpse of the Chinese state’ s par-
ticipation in FDI and its financing, since state actors can
also be involved in companies that are not identified as
state-owned enterprises.

There are also countless informal interwoven links that
affect private companies (Szepan 2016: 199-203). Pri –
vate enterprises making investments in line with the
Going Global Strategy are as eligible for credit concessions
and other assistance as the SOEs (Jungbluth 2014a: 184-
186, 261-263). This might create unfair competition if, for
example, Chinese bidders in M&Atransactions are able to
pay higher prices because they are receiving political sub-
sidies. Under these circumstances, it is very difficult to dis-
tinguish between the business and political motives for
Chinese FDI.