世界经济概论（英文版）chapter 13 Foreign Direct Investment

chapter13ForeignDirectInvestmentInthischapter,we’llcover:EvolutionofChina’sFDIPoliciesPatternsofChina’sFDIInflowsImpactofMNCsonChina’sEconomicDevelopmentChina’sOutwardDirectInvestment(ODI)EmergingChinaMNCsEvolutionofChina’sFDIPolicies1.ProcessofGradualOpening(1979to2000)Limitedopeninginthelate1970sandearly1980sActivepromotionIn1986

China’sproactivepoliciestowardFDIresultedinincreasinginflowofforeigncapitalinthelate1980sand,inparticular,early1990sEvolutionofChina’sFDIPoliciesPrioritizingInvestmentsfrommid1990stheInterimProvisionsonGuidingForeignInvestmentin1995toprovideguidanceforFDItowardssectorsthatsuitChina’snationaleconomicandsocialdevelopmentplan,andprotectthelawfulrightsandinterestsofforeigninvestorsinaccordancewithrelevantstatelaws.EvolutionofChina’sFDIPolicies2.SystematicRegulatoryFramework(2001-2011)Twoprominentcharacteristics:emphasishasbeenplacedonthecreationanddevelopmentofamoreconsistentandsystematicregulatoryframework.moreeffortshavebeenmadetocreateandamendthelegislationinconformitywithinternationalrulesandrequirementsforFDI.EvolutionofChina’sFDIPolicies1)AmendmentsoflawsgoverninglegalentitiesofFDIfirmsAbolitionoftheforeignexchangebalancerequirementEqualaccesstodomesticandoverseassuppliersRemovalofthemandatoryexportrequirementAbolitionofbusinessplanfilingEvolutionofChina’sFDIPolicies2)Provisionsoncross-borderM&AandAnti-MonopolyLawtheProvisionsonMergersandAcquisitionsofDomesticEnterprisesbyForeignInvestorsEvolutionofChina’sFDIPoliciesTheProvisionsdefinethatamergeroracquisitionofadomesticenterprisebyforeigninvestorscouldmeaneitheranequityacquisitionoranassetacquisition.TheProvisionsrepresentafurtheropeningtowardscross-borderM&Asinlinewithstandardinternationalpractice.EvolutionofChina’sFDIPoliciesIn2007,ChinaenacteditsfirsteverAnti-MonopolyLawIncludesresalepricemaintenance,pricefixing,andanti-competitivesupplyandmarketpracticesEvolutionofChina’sFDIPolicies3)AdjustmentsofindustrialpoliciesforFDIChinaformulatedtheProvisionsonGuidingtheOrientationofForeignInvestmentin2002.ChinaissuedaseriesofregionalandsectoralindustrialcataloguestoguideFDI.EvolutionofChina’sFDIPoliciesIn2010,theStateCouncilreleasednewregulationsonforeigninvestment.ThesechangesdemonstratethatChinaisseriousaboutupgradingitsindustrialstructurethroughutilisingforeigncapitalinordertoachievesoundandhealthyeconomicdevelopment.EvolutionofChina’sFDIPolicies4)UnificationofTaxSystemforInvestmentIn2007,thegovernmentissuedtheEnterpriseIncomeTaxLaw,unifyingthetaxratesat25percentforforeignanddomesticenterprises.EvolutionofChina’sFDIPoliciesToconclude,Chinahaspursuedpoliciesaimingatopeninguptheeconomyandattractingforeignparticipation,takingagradualandprudentapproachintheprocessofliberalization.PatternsofChina’sFDIInflows1.DevelopmentsinEarlierStagesIntheearlyyearsafterChina’sopening,FDIwasmostlyintheformofcontractualjointventures,wheretherisksofforeignparticipantsarelower.Inthelate1990s,whollyforeignownedenterprisesbecameincreasinglyimportant.PatternsofChina’sFDIInflowsAtthesametime,moreinvestmentmovedupnorthalongthecoasttoShanghaianditssurroundingprovinces.Tosumup,sincethelate1970s,FDIinflowsinChinahavegrowncontinuouslyandrapidly.PatternsofChina’sFDIInflows2.RecentTrendsChina’saccessiontotheWTOprovidesmoreincentivestoforeigninvestors.Despitetheglobalfinancialcrisis,FDIflowstoChinacontinuedtorise,demonstratingitscontinuingpopularityasaninvestmentdestination.PatternsofChina’sFDIInflowsThelow-costrelocationstoryFDIshiftfrommanufacturingtoservicesFromone-waytotwo-wayrelationshipPatternsofChina’sFDIInflowsForeigninvestmentinChinaisnotdeclining,butshiftingfromasset-seekingFDIinfirst-tieredcitiestomarket-seekingFDIinthesemegacitiesandasset-seekingmanufacturingFDIelsewhere.ImpactofMNCsonChina’sEconomicDevelopment1.FIEs’SpilloverstoChineseFirmsInhighspeedrailroadtransportIninformationtechnologyInautoindustryIncivilaviationImpactofMNCsonChina’sEconomicDevelopment2.ManufacturingFDIandSophisticationofChineseExportsMultinationalcorporationsinmanufacturinghavepropelledChina’sexportsfromlowskill-intensivetohighskill-intensiveproducts.ImpactofMNCsonChina’sEconomicDevelopment3.DomesticContentandValue-AddedinChinaforMultinationalExportersMostoftheburgeoningnewactivitiesinChinahavebeenremarkablywellconstrainedtoandcontainedwithintheplantsownedandcontrolledbyforeignmultinationalsandtheirinternationalsuppliers.China’sOutwardDirectInvestment(ODI)1.EvolutionofPolicyConditionsThefirstperiod,from1978to1991Thesecondperiod,from1992to2000Thelastperiod,from2001onwardChina’sOutwardDirectInvestment(ODI)2.PullingandPushingFactorsFourtypesofoutwardFDI:resource-acquiringFDImarket-expandingFDIefficiency-improvingFDIasset-seekingFDIChina’sOutwardDirectInvestment(ODI)Pullingfactors:favorablenaturalandeconomicresourcesabroad.Pushingfactors:increasingdomesticcompetition,excessproductioncapacity,massiveforeignexchangereserve,risingdemandsfornaturalresources,andthegovernment’policiesandfinancialsupporttoFDIabroad.China’sOutwardDirectInvestment(ODI)3.GeographicDistributionGeographically,China’soutwardFDIspreadsover150countries,butthemajorityofsuchFDIoutflowsareconcentratedinitsneighboringeconomies.EmergingChinaMNCs1.BusinessstrategiesBackwardandverticalintegrationStateresourcesandenergysecurityPartnershipsandjointventuresParent-satelliteinvestmentsEmergingChinaMNCs2.China’s‘first-movers’Notjustfromtraditionalindustriesbutalsothetelecomsandinformationtechnologysector.E.g.Sinopec,ChinaNationalOffshoreOilCorporation(CNOOC)andChinaMinmetalsCorpEmergingChinaMNCs3.ChallengesforChineseMNCshighlevelsofdebtandminimalinternationalexperience.culturaldifferences,politicallyinfluencedstrategiesanddifferentmanagementstandards.lackofcollaborativebusinessmodels.EmergingChinaMNCs4.RecentTrendsOnthewhole,themaininterestsforChineseMNCsarethreefold.1)First,ChineseMNCsgoabroadistosecuredomesticneedsinenergyandnaturalresources.EmergingChinaMNCs2)ChineseMNCsaimatimprovingtheirmarketpositionabroadwiththegrowingcompetitivenessdomestically,todiversifytheiractivityabroad.3)Chinamassivelyinvestedintheknowledge-intensiveeconomy,meaningthatChineseenterprisesinvestmostlyinmatureeconomiestoaccessandtransfertechnologies.EmergingChinaMNCsTheobjectivesbehindChineseinvestmentsabroadalsodependonthetypeofinvestors:publicandprivate.China’soutwardforeigndirectinvestment(FDI)issteadilyincreasing.EmergingChinaMNCsTosumup,China’soutwardFDIhas