Chinese-language edition of FDI in China introduced in Beijing

The project of Developing China: The Remarkable Impact of Foreign Direct Investment was commissioned by Hinrich Foundation and undertaken by Enright, Scott & Associates. The English-language version of the book was released in September 2016, and the Chinese-language edition has now been launched in China under the joint efforts of Hinrich Foundation, Chinese Academy of International Trade and Economic Cooperation, MOFCOM, and the publisher, China Financial and Economic Publishing House.

Kathryn Dioth, Chief Executive Officer of Hinrich Foundation said, “Foreign direct investment is an essential ingredient for sustainable trading relationships between countries. The Foundation initiated this research program because it believes that FDI and FIEs contribute significantly more than mere capital inflows to an economy. We hope to explore all the ways in which a country can benefit from FDI and help companies better evaluate the value that they bring.”

In Developing China: The Remarkable Impact of Foreign Direct Investment, Professor Michael Enright adopted an array of methods, including econometric analysis, city and region case studies, and corporate cases studies, and introduced a new method—economic impact analysis, to assess the ripple effect of FDI and its operation through supply chains, distribution channels, and the spill-over effects that would not be otherwise recognized. The economic impact analysis shows the real benefit brought by foreign direct investment is beyond expectation.

Taking into account the direct impact of the investment, the operation of foreign invested enterprises, supply chains and the staff expenditure, the contribution to China’s GDP made by foreign investment and foreign invested enterprises is approximately 16%-34%, and that the contribution to China’s employment is approximately 11%-29%, from 1995-2013.

In addition, Professor Enright contended that, “FDI and FIEs have brought to China a whole range of catalytic impacts and spill over effects that are impossible to quantify. These include modernizing Chinese industries, supporting suppliers and distributors in China, bringing improved technologies and R&D to China, introducing modernized management training and education, and bringing regional and global management to China. FIEs have also raised China’s awareness towards the value of intellectual property, and the importance of innovation.”

Based on reviews of China’s Opening and Reform history, the book provides much value for reference. It reminds decision-makers that foreign investment has remarkable impacts on national development; it helps managers of foreign invested enterprises to make their case to their host economies; and it provides fresh angles to examine the impact of foreign investment. Qiyuan XU, Researcher from the World Economics and Politics Institute at the Chinese Academy of Social Sciences elaborates, “When China is actively pushing its Belt and Road Initiative, Developing China: The Remarkable Impact of Foreign Direct Investment showcases the positive impact of foreign direct investment on host economies, offering valuable reference for other developing countries handling relationships with foreign investment and foreign-invested companies.”

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