This paper discusses the role of government policy in attracting
foreign direct investment (FDI) in China.
Written in 2008; 2,860 words; 21 sources; APA; $ 84.95
Paper Summary:
This paper explains that, with the advent of its reformist policies in the late 1970s, China opened what is potentially one of the world's large markets to foreign direct investment (FDI). The author points out that, initially, the government tried to draw that investment into areas that were familiar to emigres resulting in a spectacular influx of FDI. The paper reports that, in subsequent years, the government has attempted to redirect FDI to other areas, with much less success. The author points out that FDI is allocated through the decentralized, largely market-oriented mechanism, which supports the view that the Chinese central government has only a limited capacity to compel private groups and local governments to adhere to policies it believes are in the national interest The paper concludes that China has received a huge amount of FDI, which will have profound impacts on that country in the coming decades.
Table of Contents:
The Reform Period and Foreign Direct Investment
The Goals of Reform
China and FDI: The Initial Success
The Inability to Control Special Interests
The Lack of Social Embeddedness
Conclusion
From the Paper:
"Indeed, the change was sufficiently sudden that in several instances, the ideological rationale for the change was not formulated until after markets were opened to foreign investment. The rationale for the new policy was reflected in several areas. In terms of economic development, the Chinese conceded that despite major gains, their economic condition was not improving at a rate comparable to that of other comparably situated countries. The new policies were advanced as allowing China to secure needed new sources of capital, advanced technology, advanced management skills."
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