THE IMPORTANCE AND EVOLUTION OF FDI INFLOWS IN CHINA

Abstract

Foreign Direct Investment (FDI) produce a plethora of positive direct effects on the host countries, such as additional resources and capabilities, added tax revenues, and GDP growth. Furthermore, they link the host economy to the global marketplace and improve the balance of payment. Apart from these direct effects, there are also many indirect consequences that must be taken into consideration, such as new management styles, new work culture, and more dynamic competitive practices. The sustained flow of FDI into developing nations is without a doubt an important stimulus for economic growth. In the present paper, the main objective is to present the inward FDI in China over the last 5 years, while highlighting the impact of the pandemic on the investment inflow. To achieve this goal, I have explained the importance of FDI inflows in the economic development of a country, I presented China s macroeconomic performance in recent years, and finally, I performed an analysis of the evolution of FDI inflows in China for the period 2017 – 2021. Regarding the methodology used, I have elaborated quantitative research, by collecting information and data from China s national statistics, international statistics, and from specialized literature. The hypothesis of the research is that despite being the country where the pandemic broke out, China managed to remain an attractive place for foreign investors.