ECON 455 Lecture 14_FDI

ECON 455 Lecture 14_FDI - 1 1 Econ 455: Chinese Economics...

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Unformatted text preview: 1 1 Econ 455: Chinese Economics Lecture 14: March 7 Foreign Direct Investment: why is there so much flowing to China? Sandra Poncet Lorch Hall, room 207 Email: sponcet@umich.edu Office Hours: Mondays 16:30-18 & Wednesdays 10:30-12 2 Introduction Largest FDI receipts of any developing country:-one-third of total developing-country FDI inflows-more than 50 billion dollars per year Three distinctive characteristics have marked investment in China: -First, FDI has been the predominant form in which China has accessed global capital-Second, an unusually large proportion of Chinese FDI inflows are in manufacturing industry.-Third, FDI inflows have predominantly come from other East Asian economies , especially Hong Kong and Taiwan. Each of these characteristics reflects the dominant role played by the cross-border restructuring of export-oriented production networks . 2 3 Lecture Outline I- Gradual liberalization of FDI flows A-Background: theory B-Modes of FDI II- Description of sources and use of FDI A-Characteristics of FDI in China A-1-Where do FDI come from A-2-Where does FDI go? A-3-In which sectors does FDI go? B-Why is there so much FDI in China? B-1-Traditional explanations B-2-Thesis of Yasheng HUANG Conclusion 4 I-Gradual liberalization of FDI flows 3 5 Recall: Chinas Opening to the Outside World: A Chronology December 1978, 3 rd Plenum of the 11 th Central Committee January 1, 1979, China normalizes relations with the U.S. January 28, 1979, Deng Xiaoping visits U.S., signs agreements with President Carter, and travels to Atlanta, Houston, Seattle (symbolizing quest for technological assistance) July 8, 1979, China announces new FDI law for establishment of joint ventures, permits income remittance,...
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ECON 455 Lecture 14_FDI - 1 1 Econ 455: Chinese Economics...

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