Nobody downloaded yet

Analysing factors effecting Foreign Direct Investment in China - Essay Example

Comments (0) Cite this document
Summary
In case of the introduction of an innovation in a market the domestic markets benefit from the diffusion of new technology. In the other case when the labour move from domestic firms to foreign firm technology diffusion takes place. The benefits in shape of capital financing it generate put forth the idea that FDI plays an important role in the modernisation of economy and increasing the growth.
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.8% of users find it useful
Analysing factors effecting Foreign Direct Investment in China
Read TextPreview

Extract of sample "Analysing factors effecting Foreign Direct Investment in China"

Download file to see previous pages Southeast China in particular has become a hotbed of business activity. Presently, China is actively encouraging trade with the West, and it is a major trading partner of the United States. Despite this progress, many U.S. and European multinationals find that doing business in the PRC can be a long, gruelling process that often results in failure. One primary reason is that Western-based MNCs do not understand the role and impact of Chinese culture.
The country launched its open door policy 26 years ago. Since the policy introduction the FDI flows in the country received a quick response. In 2004 China was at no.2nd position in the world of FDI with $64 billion. The Chinese FDI trends can be examined in two phases.
In the third phase Deny Xiaoping opened China for overall economic reform. The phase was very fruitful for China. The government introduced new policies and market oriented economic reform. In result of these reforms the FDI's started flowing into the Chinese economy at rocket speed. In November 1999 US-China had an agreement regarding the WTO, according to which many new reforms were made (Sandra, 2001) those included
In the first six months of 2002, act...
One primary reason is that Western-based MNCs do not understand the role and impact of Chinese culture.
Since the last few decades there has been a multifold increase in the FDI in China. The Chinese economy has now gaining the power of effecting the decisions of the economic bodies of the world.
History of FDI growth in China:
The country launched its open door policy 26 years ago. Since the policy introduction the FDI flows in the country received a quick response. In 2004 China was at no.2nd position in the world of FDI with $64 billion. The Chinese FDI trends can be examined in two phases.
First phase: 1979-82
Second phase: 1984-91
Third phase: 1992-99
In the first phase the government establish for special zones with incentive policies. Although there was a high inflow into those regions, the total FDI flow reached US $ 1.8 billion.
In the second phase the provinces were opened and recorded US $ 10.3 billion. In 1989 however the trend dropped.
In the third phase Deny Xiaoping opened China for overall economic reform. The phase was very fruitful for China. The government introduced new policies and market oriented economic reform. In result of these reforms the FDI's started flowing into the Chinese economy at rocket speed. In November 1999 US-China had an agreement regarding the WTO, according to which many new reforms were made (Sandra, 2001) those included
The sectors relating to the distribution services will be opened for repair and maintenance and China will phase in trading rights and distribution services over three years.
The Government for the investment opened the telecommunication industry of China.
The professionals were also allowed access to the service markets of China. The services included according, consulting, Information ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Analysing factors effecting Foreign Direct Investment in China Essay”, n.d.)
Analysing factors effecting Foreign Direct Investment in China Essay. Retrieved from https://studentshare.org/miscellaneous/1529732-analysing-factors-effecting-foreign-direct-investment-in-china
(Analysing Factors Effecting Foreign Direct Investment in China Essay)
Analysing Factors Effecting Foreign Direct Investment in China Essay. https://studentshare.org/miscellaneous/1529732-analysing-factors-effecting-foreign-direct-investment-in-china.
“Analysing Factors Effecting Foreign Direct Investment in China Essay”, n.d. https://studentshare.org/miscellaneous/1529732-analysing-factors-effecting-foreign-direct-investment-in-china.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Analysing factors effecting Foreign Direct Investment in China

Foreign Direct Investment (FDI)

...in foreign countries with an aim of inputting capital into these companies in return for gains in cheap labor or raw materials for the production processes. Through strategic alliances, both the company in the host country and the investing company gain from the benefits of a business alliance by sharing resources for their advantage and business gain. There are many effects or implications of foreign direct investment on the economic growth of the host country. According to Hansen (1998, p. 362), it is through foreign direct investment that a company within the host country receives...
10 Pages(2500 words)Essay

Foreign Direct Investment

... aspect of IFIs in the past decades was the growth of globalization and the increasingly integrated role of the capital markets. In the early 1980s, a bulge in the level of capital flows in the direction of emergent markets became more prominent, on the basis of managing the oil revenues. Yet this degenerated into the 1982 economic meltdown due to accumulated debts. After a lull of economic crisis and the development of stronger macroeconomic policies which yielded stability, the world economy registered a sharp rise in the capital flows in the early 1990s. This came at a time when many countries that sought to rely upon direct foreign investments and credit services from non-banking organizations, accounted for the primary source... in the...
17 Pages(4250 words)Essay

Japan Foreign Direct Investment

...rates of return in both the United States and Japan. Any shift in any of the above mentioned factors can change the entire course of a foreign direct investment stream. In a deeper sense the effects of changes on the foreign exchange market on investments are more profound on multinational corporations. Citing again the instance of a decline in the value of the currency of the host country relative to the investing source country, it is worth stating that should this situation of depreciation in the value of the host country's currency then the potential impact can be a significant rise in the wealth of...
7 Pages(1750 words)Research Paper

China and Foreign Direct Investment

...Q China and Foreign direct Investment-FDI Introduction 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. Of all the member countries of Asian Pacific Economic Cooperation - APEC it's only the US that holds a larger potion of the inward FDI stock. China's FDI is mainly comprised of Greenfield...
10 Pages(2500 words)Essay

Foreign Direct Investment Essay

..., a US MNE may set up a plant in Hungary and supply all the Central European markets from this production site. In this case, Hungarian exports to third countries would increase. Ekholm et al. (2003) analyse such situation in which the MNE invests in one country and uses this production site as an export platform for supplying other markets. This section describes other channels through which FDI may affect host country's exports, in addition to those described in the theory of MNE. The impact of FDI on host country exports is not only direct, through the exports of the foreign affiliates, but there may be important side effects, which may influence the...
6 Pages(1500 words)Essay

Foreign Direct Investment in India and China

...1 Introduction Foreign direct investment (FDI) is the most talked about these days in the international economic parlance and for a long time, a rat race has been continuously going on among the world nations, especially the developing countries, to attract as much FDI as possible. China and India are the two growing economies in Asia that have been frequently making news with regard to the FDI. Though these two are the two most populous countries being guided by the commonality of abundance of human resources, the disparity between these two countries in the inflow of FDI is as huge as the Himalayas. Statistics reveal that in 2001 alone, China received...
14 Pages(3500 words)Essay

Analysing factors effecting Foreign Direct Investment in China

...Running head: Analysing factors effecting Foreign Direct Investment in China Analysing factors effecting Foreign Direct Investment in China s Name] [Institution’s Name] In case of the introduction of an innovation in a market the domestic markets benefit from the diffusion of new technology. In the other case when the labour move from domestic firms to foreign firm technology diffusion takes place. The benefits in shape of capital financing it generate put forth the idea that FDI plays...
10 Pages(2500 words)Essay

Foreign Direct Investment

...considered other countries to set up operations, Ireland was able to successfully emerge as the preferred location on account of the superior quality of the physical and economic infrastructure that is available in this country, which helped it to beat out other competitors such as the Caymen islands where infrastructure development is poor. Therefore location is another significant factor that plays a role in the decision of a multinational corporation to opt for foreign direct investment. In a study conducted among Japanese MNE’s [11] executives were asked to rank the location advantages of India as compared to China and other South east Asian...
9 Pages(2250 words)Essay

Factors that affect Foreign Direct Investment

...the same period many developing nations enacted the legislations to monitor and control of FDI and the activities of multinational organizations.”(Bijit Bora, page 1)iii Late nineties and early years of 21st century allowed MNCs a complete liberal ground to play. But “FDI still failed to yield the benefit hoped for. Too many wrong conditions replaced lassiez faire institutional set up. Now in the late 20th / early 21st century, as the dealings in India, China, and Ireland show, the conditions have changed again. These might now be best described as a controlled liberal policy towards FDI policy.”(Yingqi Wei and V.N.Balasubramnayam, page xvi)iv Though various factors are responsible for...
60 Pages(15000 words)Essay

Factors of foreign direct investment in Algeria

...of coming up with the solutions which can effectively solve this problem. This study concentrates in Algeria to represent the Middle East since the study cannot cover the entire Middle East. In this study, France is used as the main example. Introduction Foreign direct investment can be defined as a foreign ownership of the productive assets in a country. These assets can be mines, land, factories among others. In the present world, the issue of the foreign direct investment has become very important since foreign investments promote economic Globalization....
18 Pages(4500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Analysing factors effecting Foreign Direct Investment in China for FREE!

Contact Us