Effect of Foreign Direct Investment on China's Economic Performance Essay

Effect of Foreign Direct enthronement on mainland Chinas Economic Performance - Essay ExampleThe Chinese understand this very well. While relying principally on its own forces to bring ab reveal modernization, China, as a developing country, has to win foreign assistance, actively develop scotch cooperation, and reasonably use and absorb foreign technology useful to its overall stinting development. For these reasons, China forged ahead with its decisive policy to set up Social and Economic Zones (SEZs) and designated 14 open cities to attract world resources.It is obvious that the SEZs and opened cities have performed the functions set out for them to the extent possible at this stage of their development. Foreign capital, technology, and equipment have been introduced, competition has been promoted, and the training of personnel has occurred. Indeed, the SEZs and opened cities represent the guidance of a substantial share of all foreign investment flows to China, and signif icant economic development has been achieved. ... Indeed, the SEZs and opened cities represent the focus of a substantial share of all foreign investment flows to China, and significant economic development has been achieved. More important than their enormous vitality in absorbing and utilizing foreign capital and import advanced technology, the SEZs and opened cities represent a significant pioneering undertaking by China in carrying out the policy of opening the country to the outside world and in serving as experimental centres in economic structural reform to create a completely new set of conditions for economic development. As such, a new avenue has been opened, creating opportunities for foreign investors wishing to become involved in a quick expanding Chinese marketplaceStrong foreign investment inflows to China were not unique during the 1990s. Significant inflows to separate Asian countries also occurred during the same period. Compared with representative neighbouring countries, investment flows into China were large in absolute touchstone but remained relatively small in terms of gross domestic product (GDP) and gross investment (GI). Foreign equity investment into Singapore between 1990 and 1999 accounted for about 15 percent of GDP and financed more than one-third of Singapores total capital expansion. The same ratios for China were only 0.7 and 1.8 percent, respectively. Even when compared with Malaysia, Thailand, and Indonesia, the ratios for China were extremely low. (Woo, 2001, 110)China enjoys several advantages in attracting foreign investment compared with other Asian countries. First, it has a large domestic market that provides potentially enormous opportunities for foreign investors. Second, it has abundant natural