China’s FDI

Critically Discuss the Employment Impacts of FDI upon China

China attracted a record $52.7bn (;32.9bn) in foreign direct investment (hereby referred to as;FDI;) in 2002. The Chinese government made it easier for foreign companies to expand in China and entry into the World Trade Organisation (WTO) in 2001 has resulted in liberalisation in some industries. A United Nations report has indicated China will become the top recipient of foreign director investment (FDI), overtaking the US. The state media reported that China expected to attract about $100bn in FDI a year between 2006 to 2010 (BBC, 2003a).
With inflation low, labour cheap and plentiful, urbanisation driving demand, and a savings rate of 30% providing easy capital, China is a manufacturer’s dream. No wonder the Pearl River Delta in the south-east of the country, once a rural backwater dominated by rice paddies, has turned into the world’s factory floor (BBC, 2004).
Chinese urban growth is unique, large and complex, and has provoked much scholarship. Before the period of economic reforms, China seemed to be in a stage of under-urbanization. By previous assessments, its urban development has been greatly influenced by national political ideologies and development strategies. Since the introduction of economic reforms in 1978, the Chinese urban system has experienced spectacular growth, accompanied by a rapid rise of urbanization levels from about 20% to more than 36%. In the 1980s, in the face of strong pressures for urban in-migration due to the relaxation of rural-urban migration control, policy was strictly controlling the size of large cities, rationally developing medium-sized cities, and vigorously developing small cities. However, in reality, China;s policy of controlling large city growth has not been effectively implemented, and large cities grew at a much faster pace in the past decade. Large city growth remains appreciable, due largely to t…

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