China is one country which escaped from the current global financial crisis without much damage. As per economic gurus, China’s economy will surpass that of the US’s within 20 years of time. Earlier, China was reluctant in opening their economy, but at present their economy is more transparent than even Japan’s economy. Moreover, China’s trade in 2004 was equal to 70% of its GDP, while that of Japan was 24%. China received $60.6 billion of foreign direct investment in 2004, while Japan, received only $20.1 billion (Overholt, 2005, p.5). China has adopted an economic policy in which they were ready to open the unimportant sectors for the FDI whereas the critical sectors were kept under government control only. They have encouraged privatization in many small scale industries and less important industry sectors and that also in bulk. Xinhua, Chinese daily, has quoted the opinion of the World Bank chief economist, Deepak Bhattasalithe recently. He has told to the Chinese daily that, not only the Chinese Governments effective policies on taxation, but its long-term investment in infrastructure construction also contributed to a more pleasant investment climate (Xinhua, 2004).
There is no second opinion about the immense economic developments happening in China. Economic growth of a nation is controlled by many parameters like, political stability, lack of agitations in the society or industrial sectors and also the country’s ability to mobilize the internal resources along with attracting foreign direct investments (FDI) in the country. The people’s living standards, unemployment problems, educational levels, infrastructure developments, overall domestic peace levels and also the relationships with the neighboring countries, all will reflect the economic growth of a nation. China has all the above qualities and hence corporate can think about investing in China.
China is the number one country in the world as