ABSTRACT
The purpose of this chapter is to provide a detailed analysis on the characteristics of FDI in China with respect to locational advantages. Given the spatial question is at the heart of this research, the distribution of FDI in China on a provincial and macro-regional level is of great import. This chapter is thus divided into three main parts. The first section is an examination of China in geographical and regional terms highlighting the comparative advantage of the coastal regions with respect to agriculture and trade. The second section analyses the economic development of China in the post-revolutionary period, emphasizing the fixed asset investment in the central regions for defense purposes running against the traditional comparative advantage of the coastal region. The third section details the reform process after 1978 with respect to policy, the development of special economic zones and open coastal cities and the expansion of the reform process in the key delta areas and peninsulas, the movement of FDI inland and the expansion of regions with authorities to host foreign investment, its spatial impact with respect to the coastal region and later plans. The fourth section examines FDI as a development strategy for China and China’s host country characteristics. The fifth section examines the characteristics and trends of FDI in China, initially examining global FDI, and its patterns and characteristics, before analyzing FDI inflows into China from 1979. Thereafter the characteristics and patterns of FDI in China are examined with respect to form, sector, country of origin, and country of origin and sector. The sixth section is an examination of the potential spatial determinants of FDI in China based on the literature. The variables examined are: FDI inflows, population distribution, GDP, trade, education, transportation 26infrastructure (road, rail, inland waterways and air-staff), and wages (average wage and efficiency wage). The final section is a summary of the chapter. Where data is analyzed, constant 1980 prices are preferred. However, data exigencies may dictate that subsequent years may have to be utilized instead. Furthermore, space constraints preclude the utilization of more tables.
