This study examines the motives and locational factors of the Chinese foreign direct investment in smaller developed economies. The target economies of the study are both Finland and Sweden in order to improve the generalizability of the results. In the academic literature, foreign direct investments have been studied extensively but the Chinese investment is a relatively new phenomenon which has not been studied much - especially in the small developed economies. In recent years, the Chinese have rapidly increased their foreign investments, so it is increasingly important to understand why the Chinese invest abroad and how the different factors affect their investment decisions about the destination countries. Purpose of this study is to provide additional information on these issues in the context of small developed economies.