The main purpose of this paper is to explore and scrutinize the progress of China’s outward foreign direct investment (FDI), with special attention to its motivation, its sector distribution, scale operation and geographical distribution, its overall benefits and problems, and its future prospect, helping to shed some light on this subject by providing a careful and exhaustive analysis. China’s overseas investment began only 20 years ago, but the speed at which it has developed is somewhat impressive when compared to that of other developing nations. China’s investment has not taken the same form as that of the advanced nations and the other developing countries, whose approaches were strictly in accordance with the competitive advantage of their own domestic industry, and whose overseas investment was utilized to create a comprehensive industry system. China has instead undertaken aggressive FDI overseas, with the aim of increasing its influence on the international stage, in both economic and political terms. Since FDI is probably the major driving force contributing to the globalization of the international economy, with the continuing rapid growth of Chinese outward FDI, the increasing global integration of financial markets and internationalization of investment portfolio, the Chinese transitional economy is undoubtedly set to irreversibly integrate into the global economy.
