What does China's government do to attract foreign investments?

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Expert Solution

In the early 2000s, China overtook the United States as the world's largest recipient of foreign capital. Conditions in the global capital markets and general economic environment play a role in determining the flow of FDI into China.

China's attractiveness as a destination for investment capital rests on its development of infrastructure, resource availability (physical and labor), productivity and workforce skills, and the development of the business value chain.

Another component for attracting FDI involves the availability of low-cost, skilled employees who possess the necessary aptitudes, experience and proficiencies to create, manufacture, and provide goods and services that can compete in global markets.

The most glaring aspect of China is the sheer size of its population and market, and the prospects for growth that result from this size. The ability of enterprises backed by foreign capital to sell to a sizeable local market makes China an attractive destination for FDI.

Political and economic stability in China has facilitate the great influx of FDI. Stability represents predictability and the opportunity for enterprises to gain better foresight into the future.

The sheer size of its population and market, and the prospects for growth that result from this size all these factors has facilitate the influx of FDI's.

Market openness serves as an important role in attracting FDI.

Rahul Sunny answered 1 year ago

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