ABSTRACT
This chapter analyses the phenomenon of foreign direct investment (FDI) in China. It examines the different forms and composition of FDI, reviewing its development since the early days of the ‘open-door’ policy and analysing its importance to the Chinese domestic and export industries, as well as Western investor companies. The chapter focuses on the worldwide sources of FDI in China and its distribution by both region and industry. Since the early days of China’s ‘open-door’ policy, the immense flow of investment capital into the country has been dominated by ethnic Chinese investors from Hong Kong and Taiwan. Hong Kong has been the major investor both in terms of the number of projects and capital invested, and at the end of 1992 it, accounted for some 60 per cent of all FDI to China. The chapter reviews the existing research on FDI in China, emphasizing the investment mode of the equity joint venture and analyses literature on joint ventures in China.
