An Exploration of How Chinese Companies Use Tax Havens and Offshore Financial Centres: 'Round-Tripping' or 'Capital-Augmenting' OFDI? (Dylan Sutherland, Ben Matthews and Ahmad El-Gohari)


This paper elaborates on why so much foreign direct investment appears to be flowing between China and offshore financial centres and tax havens. This is an important question, as although the rise in Chinese OFDI is generally remarked upon, comparatively few studies go on to make the point that the vast majority of Chinese OFDI is still directed at only three tax havens and offshore financial centres: Hong Kong, the Cayman Islands and British Virgin Islands. It is therefore interesting to better understand this phenomenon. This chapter relates this current trend to theory and debate regarding the internationalisation of Chinese business.

Working Paper