Abstract

This paper provides a comprehensive review on foreign direct investment in China in the last three decades. It reviews the growth, the sources and the distribution of FDI in China and analyzes the major determinants of FDI into China. Moreover, the paper summarizes the major contributions of FDI to Chinese economy in terms of economic growth, total factor productivity, exports and technology progress. Finally, the paper discusses the potential impacts of FDI in China to the rest of the world: the countries competing for FDI with China and the ones as the source of FDI in China.