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China and Foreign Direct Investment - Essay Example
The establishment of the foreign direct investment (FDI) is one of the major successes in the Chinese economy over the past ten years. This is indicated by the increase in stock from $ 19 billion in 1990 to $ 300 billion by the end of the year 1999, making China one of the leading developing countries according to the stock of inward FDI…
The greater part of FDI in China has originated from other areas of Asia excluding Japan, Hong Kong which is a self governing region of china has the largest record, however the dominance of Hong Kong is illusory in that much of the FDI is from elsewhere, in fact the stock listed as Hong Kong source FDI in China is just Chinese domestic investment round tripped through Hong Kong. Additional FDI in China listed as Hong Kong in origin is in actuality from a variety of western countries and Taiwan that is sited in China via intermediaries. Unfortunately, published records do not exist to point out exactly how much FDI in China that is supposedly from Hong Kong is in fact attributable to other countries.
Foreign Direct Investment in its characteristic structure is described as a company from one country making a physical investment in another country for example building a factory (Allen et al 2005). The definition can also encompass investments made to purchase lasting interests in business ventures operating outside the economy of the shareholder. Over the past decade, the direction of foreign direct investment (FDI) in to and from Taiwan has experienced spectacular changes. Whereas the flow of FDI at best languished, the outflow ascended to extraordinary heights, with 20% of annual growth rate. ...