ABSTRACT

Foreign direct investment (FDI) in China has been accelerating since the early 1980s. According to the International Monetary Fund, the amount of annual foreign investment flow into China in 1998 was only less than that into the United States. The World Development Indicator 2000 by the World Bank reports that China took in US$43.75 billion as investment in 1998, a dramatic increase from US$0.43 billion in 1982. Issues on why China has attracted such a large amount of FDI have engrossed a number of scholars. Most scholars of China FDI base their studies upon current FDI theoretical frameworks, while others build their researches on the foundation of other disciplines and theories. Some of the studies examine why companies decide to invest into China, as most researches investigate the characteristics of China, i.e., how China can attract more FDI than all other developing countries, or what factors influence the inflow of FDI. Even more complicated, China FDI inflow is conceived differently from that of other countries because a large portion of the investment comes from overseas Chinese, particularly from Chinese in Hong Kong, Macao, and Taiwan.