Inderscience Publishers

FDI in China and its economic impact

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The paper is primarily structured in four sections. Section 2 deals with the four-stage reform process of infusion of Foreign Direct Investment in China. It provides an indepth understanding of how China moved from a controlled economy to a more open market economy. Section 3 discusses the primary and secondary determinants of FDI in China, namely, the market size, sectoral distribution, availability of cheap labour and various other determinants. Section 4 deals with the economic impact of FDI in China. This section speaks about the internal as well as the external impacts of FDI on Chinese economy. The final section considers the future challenges facing China in spite of having continuous flow of foreign investment in the country.

Keywords: foreign direct investment, FDI, special economic zones, China, economic growth, economic development

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