1st Edition

Developing China: The Remarkable Impact of Foreign Direct Investment

By Michael J. Enright Copyright 2017
    274 Pages 9 B/W Illustrations
    by Routledge

    274 Pages 9 B/W Illustrations
    by Routledge

    One of the most important features of China’s economic emergence has been the role of foreign investment and foreign companies. The importance goes well beyond the USD 1.6 trillion in foreign direct investment that China has received since it started opening its economy. Using the tools of economic impact analysis, the author estimates that around one-third of China’s GDP in recent years has been generated by the investments, operations, and supply chains of foreign invested companies. In addition, foreign companies have developed industries, created suppliers and distributors, introduced modern technologies, improved business practices, modernized management training, improved sustainability performance, and helped shape China’s legal and regulatory systems. These impacts have helped China become the world’s second largest economy, its leading exporter, and one of its leading destinations for inward investment.

    The book provides a powerful analysis of China’s policies toward foreign investment that can inform policy makers around the world, while giving foreign companies tools to demonstrate their contributions to host countries and showing the tremendous power of foreign investment to help transform economies.

    1. Introduction

    2. China’s Approach toward Foreign Investment

    3. The Economic Impact of Foreign Companies in China

    4. Catalytic Impacts and Spillovers from FIEs

    5. Foreign Investment in Chinese Cities

    6. Corporate Case Studies

    7. Econometric Analysis of Foreign Investment in China

    8. Perspectives on Foreign Investment in China


    Michael J. Enright, a leading expert on competitiveness, regional economic development, and international business strategy, became the Sun Hung Kai Professor of Business at the University of Hong Kong in 1996 after six years as a professor at the Harvard Business School. He is also a director of Enright, Scott & Associates consultancy and a founder of The Competitiveness Institute. Professor Enright has consulted for companies, governments, and multilateral organizations in more than 30 countries on six continents on international business strategy, competitiveness, regional clustering, technology policy, and economic development; has appeared in 40 countries as a featured speaker; and has authored numerous books and monographs on international competitiveness and China’s development.

    This volume describes the step-by-step process through which China opened its economy to foreign direct investment and how this investment has helped transform the economy. Using a novel combination of economic impact analysis, econometric analysis, city case studies, and corporate case studies, Professor Enright shows the massive impact that foreign direct investment has had, and continues to have, on China’s economy. This book should prove extremely useful for policy makers focused on inward investment, as well as companies wishing to make the case for their impact on host economies.’ — Karl Sauvant, Resident Senior Fellow, Columbia Center on Sustainable Investment; former Director, UNCTAD Investment Division

    Developing China is the most comprehensive study of the role of foreign invested enterprises in China's economic transformation available. It analyzes the evolution of government policy toward foreign investment and, more importantly, provides a path breaking analysis of the contribution of foreign firms to the growth of output and employment in China.’ — Nicholas Lardy, Anthony M. Solomon Senior Fellow at the Peterson Institute for International Economics 

    Michael Enright forcefully assembles mountains of quantitative data and well chosen case studies to demonstrate how critical foreign investment and mulitnational companies have been to China’s meteoric rise over the past four decades. From Shanghai to Sichuan, from technology innovation to public policy to corporate social responsibility, the fingerprints of foreign businesses are everywhere. Scholars, business strategists, and policymakers interested in China’s economic transformation and the powerful role multinationals play around the world should read this book.’ — Scott Kennedy, Director of the Project on Chinese Business and Political Economy, Center for Strategic and International Studies