ABSTRACT
From late 1978, when China adopted the economic reform and open-door policy, to the end of 1999, China approved over 340,000 foreign-invested enterprises (FIEs) and, by the end of that period, pledged and actual foreign direct investment (FDI) reached US$613.7 billion and US$307.8 billion respectively (Wei and Liu, 2001). FIEs have played an increasing role in economic development. For instance, in 1995, FIEs employed 6.1 per cent of total employees but produced 14.8 per cent of total value added in Chinese industry (The Data of the Third National Industrial Census of the People’s Republic of China in 1995, hereafter the Third Industrial Census).
