Made in China: From World Sweatshop to a Global Manufacturing Center?

Yun-Wing Sung
Additional contact information
Yun-Wing Sung: Department of Economics Chinese University of Hong Kong Shatin, Hong Kong, SAR, China

Asian Economic Papers, 2007, vol. 6, issue 3, pages 43-72

Abstract: This paper argues that foreign investment is a second-best instrument that helps China to succeed in export-led growth by circumventing the many distortions that discriminate against domestic private enterprises. China's dependence on foreign investment for exports should decline as China builds up its market economy, but its generous preferences for foreign investors may unduly prolong its dependence. It is found that China's exports are increasingly dominated by the low value-added processing exports of foreign affiliates. In the case of Hong Kong investment in export processing on the Chinese mainland, the value-added in the Mainland is often less than that of re-exporting the output in Hong Kong. Since 2004, China has amended its treatment of foreign investments to attract higher-quality foreign investment and upgrade processing exports in order to transform itself from a world sweatshop to a global manufacturing center. The policies appear to have the intended effects. (c) 2007 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

Downloads: (external link)
http://www.mitpressj ... 162/asep.2007.6.3.43 link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
http://www.mitpressjournals.org/loi/asep

Access Statistics for this article

Asian Economic Papers is edited by Jeffrey D. Sachs, Yunjong Wang and Wing Thye Woo

More articles in Asian Economic Papers from MIT Press
Series data maintained by Christopher F. Baum ().