The development of foreign direct investment in a rapidly growing economy : the case of China as of 1979

Abstract

In recent years, China became the largest Foreign Direct Investment recipient after the United States in the world, China's economy has achieved great progress since 1979 when China started reform and opening up of its economy to the outside world. Foreign Direct Investment, particularly those from the overseas Chinese sources through Hong Kong and Macao played an important role in China's economic catch-up. In this thesis, the author analyzes the development and characters of FDI in China over the last two decades, with special attention on the role of Hong Kong's investment in China, which has always made a lion's share of the total FDI since 1979. This study finds that FDI is one of the leading powers behind China's rapid economic growth in the last two decades. The affinity of culture and language between Mainland China and Hong Kong facilitated the inflow of FDI. In the new millennium, China is determined to rise as an advanced industrial country. FDI will continue to play a crucial role in China's catch-up effort. (Abstract shortened by UMI.)