The Interdependence of Trade and Foreign Direct Investment in China During the 1990s

Chung-Sok Suh and Jung-Soo Seo

Chapter 7 in Contemporary Developments and Issues in China’s Economic Transition, 2000, pp 162-187 from Palgrave Macmillan

Abstract: Abstract This chapter focuses upon international trade and foreign direct investment (FDI), which have been the engines of growth for China since the adoption of its ‘open door’ policy in the late 1970s. With rapid growth of trade during the 1990s China has experienced surpluses in its trade balance, which are structural in nature and primarily accounted for by the coastal provinces. The country has also emerged as a major recipient of global FDI flows. It is argued that both of these are related and should be considered in the context of business strategy adopted by foreign multinational enterprises (MNEs). An analytical framework is provided to show the nature and extent of interdependence between trade and FDI in China.

Keywords: Foreign Direct Investment; Host Country; Real Exchange Rate; Foreign Firm; Trade Balance (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59719-8_7

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DOI: 10.1057/9780230597198_7

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