ABSTRACT
This chapter provides an overview and analysis of China’s open door policy and the process of inducing foreign direct investment (FDI) since 1979. There is no doubt that China’s dialectic development philosophy underlies the eclectic open door policy framework. The eclectic or comprehensive system of objectives set aside for inducing FDI has important implications for understanding the characteristics of FDI in China. The relative importance of each home country can be understood within the context of their respective global distribution patterns of outward FDI. The expected role for FDI, then, is to bolster the modernization drive, along with foreign funds and direct importation of technologies and equipment. FDI is viewed as the most efficient vehicle for getting capital, technological knowledge, and managerial skills that are much needed to bring China’s economy to world standards. Different FDI in terms of technological intensity and export propensity and motivation and commitment can find different niches in China’s development process.
