Inward FDI still Mutually Beneficial in China

Stephen Olson
Publication Date: 
May 12th, 2015

More so than any other developing country, China has benefited profoundly from foreign direct investment (FDI), using it as rocket fuel to launch the country’s economic development. But it would be a mistake to interpret China’s willingness to accept strategic FDI as an indication of any great level of comfort with the notion of an enduring, conspicuous presence of FDI providers. Quite the contrary: FDI has been seen as an uncomfortable but necessary trade-off, required to bridge a developmental chasm. There is little question that China has entered a new chapter in its economic development history, and it would be unrealistic not to expect its FDI and other policies to change in order to reflect these new realities. But one must be careful not to throw the baby out with the bathwater. China continues to need FDI.

*This publication comes from Stephen Olson, "Inward FDI still mutually beneficial in China," East Asia Forum, May 12, 2015 ( It is posted with the gracious permission of Dr. Stephen Olson.

**Posting of this report does not represent an endorsement by the Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations and has been done to facilitate research and promote debate about multinational corporations/FDI in and from East Asia.