The influence of innovation to China’s economy and it’s trends of FDI
Introduction
In recent years, few developments in international economies have elicited more interest or stirred more controversy than the sudden emergence and illustrious accomplishments of China as a trading nation and manufacturing centre. China’s high rate of economic growth since the adoption of more liberal economic policies in the late 1970s, while perhaps exaggerated by the official statistics, is nevertheless a stunning accomplishment. In the space of less than a generation, China has transformed itself from a poor nation almost completely cut off from the global economy to one of the world’s most important suppliers of labour-intensive manufactures.
Since 1992, Foreign Direct Investment in China has undergone a rapid growth. As the successful reformation in both institutions and regulations, the government provided a much stabler economic environment and an investible market to foreign investors. However, as the trade of foreign-invested enterprises grew faster than China’s total foreign trade, the ratio of foreign-invested enterprises in total trade steadily increased. Accordingly, FDI inflows and global share in China have been rising continuously in the last decades. In 2003, China overtook the U.S., which attracted approximately US＄53 billion from OECD countries and elsewhere, becoming the biggest recipient of foreign direct investment in the world.
Globalization is increasingly testing the ability of regional economies to adapt and maintain their competitive edge. Performance gaps are widening between various regions, and rapid technological change, extended markets and a greater demand for knowledge are providing new opportunities for regional development. Some regions with poor links to the sources of prosperity, afflicted by environmental problem, migration, and lagging behind in infrastructure and private investment, are finding it difficult to keep up with the general trends. Similarly, in China, there are evident disparities in both distribution of FDI and per capita standard between different regions.
In this paper, I will mainly discuss China’s recent reformation, the influence to China’s economy after innovation, as well as analyze the current patterns and trends of FDI in China. In addition, some facets else related to FDI in China are also concerned.
In the first Chapter, I will briefly introduce the radical rationale of economic theories of FDI, the pros and cons of FDI, and impact of FDI as well. The main purpose is to gain a comprehensive cognition with respect to Foreign Direct Investment.
The Chapter two in which I basically discuss the process of reformation in China since the late 1978, and its influence to China’s economy, especially influence to the growth of FDI in China market. Based on the significant changes and performance, FDI in China underwent a rapid growth in both share and amount. Moreover, I also analyze Sustainable Development and the relationship between sustainable development and FDI.
In the Chapter three, my main intention is to discuss current patterns, developments, and trends of FDI in China. In particular, after China became a member the WTO, the growth of FDI was profound. Accordingly, China will continuously attract FDI inflows even foreign capital for a long time. In addition, with the collection of a number of illustrations, the imbalance still existed in China’s various regions. There are huge gaps between the fast growing coastal region and the sluggish interior region as such.
Finally, I will draw a conclusion based on all the discussion showed above. Owing to the steadier economic environment and more efficient policies and regulations, China has attracted much more FDI in the past two decades. By the rapidly growth of China’s economy, especially as a member of the WTO, China should be changed the current unbalanced situation between different regions, as well as retained fast development of FDI.
Methodol
