Foreign Joint Ventures in the People's Republic of China, 1979 to 1985

Abstract

The motivation of alluring foreign investment is an important landmark of post Mao's economic policies, and has made a great contribution to China's current economic growth. One of the major types of foreign investments in the People's Republic of China has been Foreign Joint Ventures (FJVs). Analysis of FJVs helps us understand the impacts of China's economic reforms. This paper thoroughly scrutinizes the statistics of Foreign Joint Ventures during the period of 1979 to 1985. It concludes that the spatial distribution of foreign joint venture investment indicates three locational considerations: (i) the locational advantages of the eastern coastal region where over 90% of joint venture investment has occurred; (ii) the presence of a well-established industrial and commercial infrastructure, as China's largest industrial and commercial centers have also been the largest receivers of foreign investment; and (iii) historical Sino-foreign economic and cultural relations before 1949, as post 1979 foreign investments have often been concentrated in the foreign countries' former spheres of influence. It has also been found that differences exist in the type and location of investment among the major Western investors.