Preferred to upgrade these industries rather than get rid of them to improve pollution Guangdong and Jiangsu refused to accept these factories Are also highly polluted 67
Main Sources of Inward Foreign Direct Investment in China - Hong Kong, Taiwan and Macau are former European countries which are now considered a part of China o Greatest inward FDI Tight economic communication between these regions and China Hong Kong has an independent economy Hong Kong is used as a frontier for foreign investment First foot stepped in hong kong This investment is passed on from hong kong to china - Industrailised countries o FDI fairly stable 68
Inward FDI as a Share of GDP - 1992 o After initialisation of 2nd stage reform o Substantial growth o Then a substantial decrease because of uncertainty of tax reform and unified exchange rate policies - 1997 o Asian financial crisis o Negative impact on foreign confidence - 2001 o WTO Had little effect o Positive market growth in 2001 Delayed investment after 2003 - 2008 o GFC Substantial decrease Quick recovery Since 2010 Falling rate of GDP growth o Reducing FDI from other countries 69
Composition of Inward FDI in China - In highly developed economy tertiary products account for > 70% of FDI o As the Chinese economy grew, this grew - Reliance on manufacturing industries declined o Foreign investment fell following GFC and poor economic growth since 2010 - No primary competitive advantage Outward FDI from China – Accumulated - Majority of investment in Asian countries o Rely on each other o Recognise value of relationship Collective and long term 70
- China searches for developing areas and areas with similar markets Outward FDI from China – Net Flow - Asian countries most attractive o Chinese economy rely on - Latin America highly valued - Oceania > Africa o Chinese firms prefer to invest in Australia than Africa 71
Lecture #10: Technology Policy and the Knowledge-Based Economy - China’s Technological Capabilities (Pyramid) - The broad base of the pyramid consists of basic manufacturing capabilities such as forging, welding, and machining, exemplified by a simple machine shop. - The intermediate zone represents complex manufacturing and assembly-line skills, exemplified by an automobile factory. - The apex of the pyramid represents science and research capabilities , exemplified by a laboratory or a research institute o Pure R&D research o Need this because the effect of technologies will last several decades o International competitiveness will be severely affected in decades to come if you don't continue to improve your technology - China, according to Seki, is unusual in that it emerged from the socialist era with o A strong base, o And surprisingly strong capabilities at the apex - China Base o Right now in China we can see many firms small and big with very strong manufacturing capabilities Especially in light industry Light industry processing was initiated by China in 1980's 72
- China’s Technological Capability Pyramid (continued) - China Apex o
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- YI LI
- Government, People's Republic of China, Planned economy