ABSTRACT
Since the adoption of the open door policy in 1978, the Chinese economy has grown remarkably. The growth rates have been, however, uneven across regions. On average, the GDP per capital in the coastal provinces grew at ten , while it was around eight in the central provinces and seven for the western region. Geographic location is apparently of importance for explaining the regional disparity in China’s growth.1 One factor that has contributed significantly to regional growth is foreign direct investment (FDI). In 2000, twelve fast-growing provinces, including the coastal regions, Fujian, Guangdong and Jiangsu, received about 87 percent of total FDI inflows to China. Attracting FDI to regions has become a top priority for provincial governments.
