Chinese cross-border investments are often assumed to be state driven and a tool of Beijing's economic statecraft. However, corresponding evidence remains inconclusive. This article examines mainland Chinese direct investments in Taiwan and finds that they are not particularly effective tools of economic statecraft. Their excessive politicization and the sheer possibility that investments could be used for Beijing's economic statecraft resulted in a considerable pushback by Taiwan's government, bureaucrats and civil society against large and sensitive investments. The agency enjoyed by Taiwan hindered Beijing from deploying cross-Strait direct investments for political purposes, and Beijing has not openly promoted or supported such investments in Taiwan. Moreover, cross-border direct investments are by nature less exploitable for political purposes because they involve company-level commercial and entrepreneurial decisions. This sets them apart from other forms of economic statecraft, such as sanctions or trade restrictions, where the state has greater influence. Mainland Chinese companies have had limited commercial interests in Taiwan, and the investments that have been made there do not appear to have triggered significant political or security externalities. These findings suggest more generally that foreign direct investment might not be particularly effective as a tool of economic statecraft.

Transnational history emerged strongly as globalization intensified in the 1990s, questioning national historiographies and creating new research agendas. Business history has not been part of this, but recent calls within the field to engage more visibly and authoritatively with debates on the history of globalization warrant a closer inspection of transnational history. The article draws on key concepts from transnational history and discusses their application in the work of, among others, Sven Beckert, Jessica Lepler, Stephanie Decker, Ray Stokes, and Michael Miller. The article argues that transnational history provides opportunities to increase business history's engagement with the history of globalization.