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Outward Foreign Direct Investment: A Novel Dimension of China's Integration into the Regional and Global Economy*

Published online by Cambridge University Press:  12 February 2009

Kevin G. Cai
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It is now receiving wide attention that since the adoption of the open-door policy at the end of the 1970s China has been extremely successful in attracting foreign direct investment (FDI). Particularly, according to UNCTAD's World Investment Report 1997: Transnational Corporations, Market Structure and Competition Policy, China has become the second largest recipient of FDI in the world since 1993, after the United States. On the other hand, however, it seems less noticed that China has also become a growingly important FDI exporting country. According to UNCTAD's same report, China now ranks as one of the largest outward investors among developing economies in the 1990s. By the end of 1996, the cumulative stock of Chinese outward FDI had reached over $18 billion, next only to Hong Kong ($112 billion), Singapore ($37 billion) and Taiwan ($27 billion). Consequently, China increased its share in world-wide FDI outflows from less than 0.5 per cent until 1991 to an average of 1.3 percent in 1991–95. As China is rapidly rising as a new economic power, its deepening participation in the regional and global economy, through both inward and outward FDI as well as trade, will inevitably bring about significant implications in the international political economy. This article attempts to explore the development of Chinese outward FDI, its characteristics and motives, the outward FDI regime, the government's policies and existing problems, and the prospects for the future trend of Chinese outward FDI.

Type
Research Article
Information
The China Quarterly , Volume 160 , December 1999 , pp. 856 - 880
Copyright
Copyright © The China Quarterly 1999

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References

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78. For both geopolitical and geoeconomic considerations the Chinese government has repeatedly pledged not to devaluate the Chinese yuan. These considerations are clearly expressed in a column article, “Play well the card of RMB,” in China Economic Times, 26 06 1998, p. 7.Google Scholar

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80. UNCTAD, World Investment Report 1997, Annex table B.2, p. 316.Google Scholar