Economic Growth And FDI In China

Abstract

This paper studies the importance of foreign direct investment (FDI) in economic development in China. By analyzing the data from China and comparing China with other developed and developing countries, the paper finds that FDI becomes a force in economic growth, especially in the later stage of industrialization; Specifically, the paper finds that a country’s foreign trade is the engine in the initial stage of the economic development, while FDI is the main force in the post-industrialization stage.