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Problems and profitability of direct foreign investiment in China: An analysis of the survey data

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Abstract

By analyzing a survey in the Tianjin area, this article investigates the problems and profitability of joint ventures in China, and draws some policy implications. The authors find that there are a number of systemic constraints on the profitability of joint ventures, such as input and foreign exchange shortages, rigid labor policies, conflicts between business partners, and uneasy relations with state authorities. The article concludes that unless the investment environment is improved, China will not succeed in the competition with other developing countries in attracting the foreign capital needed for its modernization.

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References

  • Hong, Sung-Woong, “Korean Direct Foreign Investment in South-East Asia and China: Perspective and Prospect.” Paper presented at the workshop on Regional Development in the Yellow Sea Rim, Beijing, China, July 1990.

  • Lee, Keun, “Chinese Model of the Socialist Enterprise: An Assessment of Its Organization and Performance.”Journal of Comparative Economics 14 (September 1990): 384–400.

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  • Shen, Xiaofang, “A Decade of Direct Foreign Investment in China,”Problems of Communism 39, 2 (1990): 61–74.

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  • UN, Center on Transnational Corporations,Foreign Direct Investment in the People's Republic of China. New York: UN Publication, 1988.

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Chung H. Lee is a professor of economics at the University of Hawaii at Manoa and research associate at the Institute for Economic Development and Policy of the East-West Center. He is also author ofThe Economic Development in Japan and Korea (Praeger 1990) andTrade and Investment in Services (Westview 1988).

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Lee, K., Lee, C.H. & Kim, W.B. Problems and profitability of direct foreign investiment in China: An analysis of the survey data. Journal of Northeast Asian Studies 9, 36–52 (1990). https://doi.org/10.1007/BF03028069

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  • DOI: https://doi.org/10.1007/BF03028069

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