Location Determinants, Investor Differences and Economic Impacts
Foreign direct investment in China has been one of the most successful aspects of China’s economic reform and opening up to the outside world. The gradual liberalization of restrictions on FDI since 1979, the government’s commitments for further opening up, particularly the commitments to the World Trade Organization in trade and investment liberalization, have greatly improved the overall investment environment in China. Foreign firms have been attracted by the huge domestic market and pool of relatively well-educated, low-cost labour, which has made China one of the most attractive destinations for FDI in the world. Over the course of the past three decades, FDI became well established in China’s economy, and the activities of multinational enterprises came to assume increasing importance in capital formation, labour training, technology transfer, international trade, and in accelerating the transition of China from a planned economy to a market economy. As a result, FDI has increasingly integrated the Chinese economy into the world economy. This book presents a comprehensive analysis of FDI in China. It provides a remarkable background of information on the growth of FDI inflows and the evolution of China’s FDI policies for the past 30 years; a thorough analysis of the leading theoretical explanations of FDI and a series of rigorous empirical examinations of the location determinants of FDI; a comprehensive analysis of the differences in investment and production behaviour between the major investors; and an in-depth investigation of the impacts of FDI on China’s economy. The results of this study provide us...