Purpose – Emerging countries are surging as important contributors of outward foreign direct investment (FDI) in both developing and developed markets around the world. This paper seeks to focus on Chinese investment in Europe with a particular consideration given to the manufacturing sector. The purpose of this paper is to analyse this new phenomenon in the context of the Eclectic Paradigm. Design/methodology/approach – This is a conceptual paper focusing on secondary research. The analysis incorporates aspects related to drivers and motivators, elements of difference, and includes considerations of the institutional role in influencing the competitiveness of firms and the strategies of countries. Findings – From this analysis emerges a contribution to theory development. A holistic model which incorporates government's role in influencing FDI is developed to advance understanding of Chinese OFDI in Europe. Practical implications – The model incorporating governmental influences on FDI presented in the paper can assist policy makers, managers and researchers in understanding the phenomenon. The analysis in the paper of the strengths and weaknesses of the new entrants and the threats and opportunities for incumbents provides insights for managers of the new entrants and incumbents alike. Originality/value – Data and scholarly research on the topic of FDI from emerging countries and on the emergence of China as a potential investor in Europe are limited. Since emerging markets are playing a growing role as sources of FDI, the study has sought to contribute particularly to the understanding of Chinese outward FDI in Europe.
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