China's Development

China's Development

China's Development

Among emerging economies, China's role as an investor country has been highlighted in the past few years. By 2004, China was the eighth most favored FDI source among developing countries. The liberalization of Chinese FDI policy in 1992 led to increased Chinese outward direct investment (ODI). The growth in Chinese ODI policy developments was driven by cautious internalization, government encouragement, expansion and regulation, implementation of a “go global” policy, and heightened domestic competitive pressures, which led to the opening up of protected industries and markets to foreign and domestic competitors. A comparative advantage as a manufacturing hub and a firm-specific advantage such as state-ownership of a large part of an industry further stimulate this growth. Chinese ODI has been positively associated with Chinese exports to the host country (the former promoting the latter), a moderate demand of inflation, and rising levels of political risk in the host country. A distinctive feature that remains with China as against other emerging economies is that many of its multinational enterprises remain in state hands, although corporatized to focus on commercial objectives. China's overall FDI inflows stood at US$82.7 billion, an increase from US$69.47 billion. The top 10 FDI inflows were mainly from Hong Kong, the British islands, South Korea, Japan, Singapore, and the United States, amounting to about US$3 billion in 2006 and about US$2.62 billion in 2007. According to the Ministry of Commerce of the People's Republic of China, the outbound nonfinancial FDI for the first half of 2007 reached US$7.8 billion, while for the full year in 2006, it was US$21.2 billion. Of this, 86% was provided by central government sources. Most of China's ODI flowed to 172 destinations, which included Latin America and Asia. In India, the overall record of macroeconomic stability, a sizable domestic market, and a relatively high degree of political stability has attracted large volumes of FDI. The foreign investment in India during 2007-2008 was driven by FDI and portfolio investment inflows. FDI inflows in India increased from US$9.17 billion in 2005-2006 to US$22.95 billion in 2006-2007 and US$34.92 billion in 2007-2008. India emerged as the second most favored FDI destination after China in 2005 and 2006. During these years, investments through Mauritius remained the largest component, followed by Singapore, the United Kingdom, and the Netherlands. Inflows from the United States stood at the sixth position at US$3.46 billion in 2005-2006, US$7.06 billion in 2006-2007, and US$4.86 billion in 2007-2008. Sectorwise, these inflows were mainly directed to financial services, construction, and manufacturing. On the other hand, ODIs from India increased from US$13.5 billion during 2006-2007 to US$17.9 billion during 2007-2008 and flowed mainly into the manufacturing sector.. (Song, 2003)

Governments across East Asia recognized that to achieve prosperity, they would have to slow down the growth rate of the population. Those who violate these policies are subject to monetary fines, denied promotion at work, and harassed by government officials. In many cases, women who had given multiple births were forcibly sterilized or forced ...