This paper examines what determines Chinese outward foreign direct investment (FDI). It finds that Chinese FDI is attracted to countries with poor institutions and abundant natural resources, with a significant interaction effect between the two. The study uses econometric analysis of Chinese outward FDI flows from 2003 to 2006, using data from the United Nations Conference on Trade and Development (UNCTAD). The results show that Chinese FDI is more attracted to countries with large natural resources and poor institutions, with the effect of natural resources on FDI depending on the institutional environment. The study also finds that Chinese FDI is attracted to large markets, and that the effect of institutions on FDI is inherently related to natural resources. The findings suggest that Chinese FDI is conducted to exploit countries with poor institutions and large natural resources, consistent with the idea of China as a "ravenous dragon." The study also finds that Chinese FDI differs from FDI from other regions in its attraction to poorly governed countries rich in natural resources, likely due to the predominant state-ownership of multinational companies and the institutional context of China. The results highlight the importance of institutions and natural resources in determining Chinese outward FDI, and suggest that Chinese investment may contribute to the "resource curse" by exacerbating resource-related problems in developing countries.This paper examines what determines Chinese outward foreign direct investment (FDI). It finds that Chinese FDI is attracted to countries with poor institutions and abundant natural resources, with a significant interaction effect between the two. The study uses econometric analysis of Chinese outward FDI flows from 2003 to 2006, using data from the United Nations Conference on Trade and Development (UNCTAD). The results show that Chinese FDI is more attracted to countries with large natural resources and poor institutions, with the effect of natural resources on FDI depending on the institutional environment. The study also finds that Chinese FDI is attracted to large markets, and that the effect of institutions on FDI is inherently related to natural resources. The findings suggest that Chinese FDI is conducted to exploit countries with poor institutions and large natural resources, consistent with the idea of China as a "ravenous dragon." The study also finds that Chinese FDI differs from FDI from other regions in its attraction to poorly governed countries rich in natural resources, likely due to the predominant state-ownership of multinational companies and the institutional context of China. The results highlight the importance of institutions and natural resources in determining Chinese outward FDI, and suggest that Chinese investment may contribute to the "resource curse" by exacerbating resource-related problems in developing countries.