ABSTRACT
US foreign direct investment in China amounts to only 1 percent of all US foreign direct investment (FDI) abroad. According to the US-China Business Council, US foreign direct investments in China have remained relatively stable. Apparently, the most significant development in terms of FDI capital inflows is the growth in FDI in China's service sector. The growth of the service sector underscores China's transition away from an export led manufacturing economy to more of a domestic consumption economy. Moreover in 2014, Central China experienced an increase in FDI growth of roughly 7.5 percent and at the same time, Eastern and Western China registered increases of 1.1 percent and 1.6 percent respectively. While the eastern provinces receive a much larger share of FDI, Central China has clearly become a very popular investment destination. Inbound and outbound FDI provide a much better picture of China's economy than the actual Gross Domestic Product growth numbers published by China's Ministry of Commerce.
