Foreign Direct Investment in China: Some Lessons for Other Countries
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Summary:
China's increasing openness to foreign direct investment (FDI) has contributed importantly to its exceptional growth performance. This paper examines China's experience with FDI and identifies some lessons for other countries. Most of the factors explaining China's success have also been important in attracting FDI to other countries: market size, labor costs, quality of infrastructure, and government policies. FDI has contributed to higher investment and productivity growth, and has created jobs and a dynamic export sector. China's success, however, did not come without some pitfalls: an increasingly complex tax incentive system and growing regional income disparities. Accession to the WTO should broaden China's "opening up" policies and continue FDI's contributions to China's economy in the future.
Series:
Policy Discussion Paper No. 2002/003
Subject:
Balance of payments Foreign direct investment Income tax systems Infrastructure Legal support in revenue administration National accounts Revenue administration Tax incentives Taxes
English
Publication Date:
February 1, 2002
ISBN/ISSN:
9781451974171/1564-5193
Stock No:
PPIEA0032002
Pages:
26
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