Assessing the factors that promote foreign direct investment in China

Abstract

This thesis proposed to evaluate the factors that promote FDI in China and the positive effect of FDI during the period of 1976-2018, based on inward FDI data, Chinese GDP growth rate data and other relevant data. I found that GDP growth rate, infrastructure level has no significant impact on promoting foreign direct investment. Another finding is provinces in coastal area attract more foreign direct investment than provinces in mainland China. For the positive effects that foreign direct investment has are it can be used to increase domestic investment, promote capital formation, promote the upgrading of China's industrial structure, and increase employment of labor force. Also, Chinese government carried out some policies to encourage more foreign direct investment after 1978.