Foreign Direct Investment in China
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Foreign Direct Investment in China

Location Determinants, Investor Differences and Economic Impacts

Chunlai Chen

Foreign Direct Investment in China is one of the most comprehensive studies of FDI in China and provides a remarkable background of information on the evolution of China’s FDI policies over the last 30 years.
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Chapter 7: FDI in Manufacturing and Comparison of Overseas Chinese Affiliates and Foreign Country Affiliates

Chunlai Chen


INTRODUCTION In Chapter 6 we identified the major investors in China. In terms of the single investors, Hong Kong is the largest investor, followed by Japan, the USA, Taiwan, South Korea and Singapore. As a group the overseas Chinese investors, namely Hong Kong, Macao and Taiwan, have been the largest group of investors, accounting for 49.29 per cent of the total FDI inflows into China during 1983 to 2008,1 followed by the other developing country investors, accounting for 26.09 per cent, and the developed country investors, accounting for 24.62 per cent of the total. The diversity of FDI sources in China provides a valuable case study of the differences between the major investors. To facilitate the study, we classify the major investors in China into two groups. One group is the overseas Chinese investors and the other is the foreign country investors. Do these two groups of investors differ in their investment and production behaviour? Although there is a growing body of studies on FDI in China, owing to the constraint of data availability, there has been a lack of studies on the comparison of the investment and production behaviour between the two groups of investors. This chapter intends to explore this issue by using some available data. To compare the investment and production behaviour between the overseas Chinese investors and the foreign country investors, we confine our analysis to the manufacturing sector for two main reasons. First, the manufacturing sector is the largest FDI recipient among all the...

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