Inward and Outward FDI in China

Abstract

An important part of the economic reform process in China has been the promotion of foreign direct investment (FDI). Investment began to flow into China after 1992, and annual inflows have been over US$40 billion since 1996. Trending steadily upward, FDI inflows were around US$70 billion in both 2005 and 2006. These inflows are by far the largest of any developing country. They have moreover remained remarkably stable and robust in spite of substantial fluctuations in the Asian and global economies. China has accounted for about one-third of total developing- country FDI inflows in recent years. In 2006, inflows to China reached an estimated US$69 billion, which represented 10% of world FDI flows.

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