Foreign direct investment (外商直接投资 wàishāng zhíjiē tóuzī) is an investment (投资 tóuzī) from a foreign (外国的 wàiguó de) entity into a business in another country which is under the investor’s direct (直接的 zhíjiē de) control or ownership and establishes a lasting and controlling interest.
Foreign direct investment (FDI) contrasts with other forms of investment such as portfolio investments, e.g. bond and equity investments, that typically yield minority, but not controlling, ownership stakes.
FDI can be distinguished into inward FDI (a county receiving investments) and outward FDI (a country sending investments abroad).
- 商 (shāng) as in commerce, business, or trade (商业 shāngyè), foreign businessman (外商 wàishāng), foreign company (外商公司 wàishāng gōngsī) or wholly foreign-owned enterprise (外商独资企业 wàishāng dúzīqǐyè).
- 投 (tóu) is to throw, fling, put, or place in; the underlying radical is 扌(shǒu) from hand (手 shǒu).
- 资 (zī) is resources, capital, or money, as in funds, funding, or capital (资金 zījīn), or as in resources (资源 zīyuán).
- Horizontal FDI (横向外商直接投资 Héngxiàng wàishāng zhíjiē tóuzī).
- Vertical FDI (垂直外商直接投资 Chuízhí wàishāng zhíjiē tóuzī).
- Inward FDI (对国直接投资 Duìguó zhíjiē tóuzī).
- Outward FDI (对外直接投资 Duìwài zhíjiē tóuzī).