Executive Summary:
As a milestone in China’s economy development, the opening up policy has built up a bridge between China and the world. Since the 1990s, the rapid expansion of international trade and large capital inflows has accelerated the integration of China in the world economy. Aim at promoting exports while protecting domestic market and industry, the capital inflows have been channelled into the manufacturing industries targeted for exports through a selective policy. There is little doubt that FDI (Foreign Direct Investment) has been a significant part of China’s economy especially in the manufacturing industries. According to the United Nations Conference on Trade and Development, since 2002, the inflow of FDI in China has toped to more than US＄ 50bn , overtaking the United States as the largest recipient of FDI inflows in the world.
In this project, through the analysis of the determinants of Foreign direct investment and the impacts on a host country’s economy, the driving forces behind the capital flows will be analyzed, evidence will be provided to show that FDI is playing an incredibly important role in China and research will be focused on the positive contribution of FDI on the domestic industry.
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1. The process of opening up in China
2. The mode of FDI and the driving forces behind the FDI inflow to China
2(A) The form of FDI in China
3. What FDI brings for China?
4 Conclusion: Forecasts and lessons for other countries