Foreign Direct Investment in Western China, 1994–2004

By: Xianming Yang and Ning Huang and Guoqing Zhao

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Synopsis: This book focuses on the FDI in western China and aims to explore the logic behind the regional development. From 1994 to 2004, China’s economy enjoyed a golden stage of rapid growth. As the top destination for foreign investment, China has integrated into the international production system and global value chain. However, it is apparent that the FDI distribution was unbalanced, as the eastern region absorbed far more FDI than its western counterpart, a situation that remained unchanged even after China launched the Western Development Strategy (WDS). This book begins with the question of why it is difficult to introduce FDI to western China, followed by discussion on the gap of technology, human capital, industrial foundation, location selection, institutional factors and investment environment between the western and eastern China. The author analyzes how the lack of FDI growth affects the long-term growth of the western region.