China’s Outbound Foreign Direct Investment Promotion System: Overall Design

Abstract

We divided the history of China’s outbound Foreign Direct Investment (FDI) since it began reform and opening up more than 30 years ago into three periods: the 1979–1989 period, when outbound foreign investment was tightly controlled by relevant plans; the 1990–1999 period, when outbound foreign investment was in transition to market rules; and the 2000–2009 period, when outbound foreign investment grew rapidly thanks to the “go global” strategy and China’s accession to the World Trade Organization (WTO). The development of China’s outbound foreign investment has four primary characteristics: transition to a market economy from a planned economy; transition from low levels of outbound foreign investment to higher levels; gradual expansion from low-end industries into high-end industries; and transition from inexperience to an accumulated wealth of experience. Overall, China’s outbound foreign investment has fundamentally kept pace with its reform and opening up and reflects the basic characteristics of each phase of reform.