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Foreign Direct Investment in China: Some Lessons for Other Countries
Author:
Mr. Harm Zebregs
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Ms. Wanda S Tseng
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Series:
IMF Policy Discussion Papers
Volume/Issue:
Volume 2002: Issue 003
Language:
English
Publication Date:
01 Feb 2002
DOI:
https://doi.org/10.5089/9781451974171.003
ISBN:
9781451974171
ISSN:
1564-5193
Pages:
26
Keywords:
PDP; FDI inflow; FDI flow; FDI regime; FDI policy; further FDI liberalization; China; Foreign Direct Investment; FDI pattern; implementing rule; Income tax systems; Tax incentives; Infrastructure; Legal support in revenue administration; Europe
Legal-disclaimer:
This Policy Discussion Paper should not be reported as representing the views of the IMF. The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Policy Discussion Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
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China's increasing openness to foreign direct investment (FDI) has contributed importantly to its exceptional growth performance. This paper examines China's experience with FDI and identifies some lessons for other countries. Most of the factors explaining China's success have also been important in attracting FDI to other countries: market size, labor costs, quality of infrastructure, and government policies. FDI has contributed to higher investment and productivity growth, and has created jobs and a dynamic export sector. China's success, however, did not come without some pitfalls: an increasingly complex tax incentive system and growing regional income disparities. Accession to the WTO should broaden China's "opening up" policies and continue FDI's contributions to China's economy in the future.
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Cover IMF Policy Discussion Papers
IMF Policy Discussion Papers
ISSN:
1564-5193
Publisher:
International Monetary Fund