Analysis Of The Motives Of China's FDI To Malaysia In Bilateral Cooperation In 2019 - 2024 Through The Oil Dunning Approach

Abstract

Malaysia is one of the main destination countries for Chinese investment, where the flow of Foreign Direct Investment (FDI) showed a significant increase throughout 2019-2024. This study aims to analyze the main motives of Chinese companies in conducting FDI into Malaysia, especially in the infrastructure, manufacturing, and technology sectors, using the Eclectic
Paradigm approach or the OLI (Ownership, Location, Internalization) theory from John H. Dunning. The method used is descriptive qualitative, with data sources in the form of official reports, academic publications, and interviews. The results show that investment motives are driven by Ownership factors in the form of capital strength, mastery of technology, and
superior human resources; Location factors in the form of Malaysia's strategic position in the ASEAN region; and Internalization factors in the form of the need for Chinese companies to directly control operational processes to minimize risk. In addition, it was found that regulatory stability and long-term policy support from the Malaysian government were also
the main attractions. Analysis through the OLI approach proved to be able to explain the rational economic logic behind the investment decisions of Chinese companies.