Foreign direct investment China

NN (2004) Degussa to Shift Pharma Production to China. Chemical Market Reporter 265 6 27 NN (2003a) ChemSite. Chemical Week 165 S6-S7 NN (2003b) VII. Foreign direct investment restrictions in OECD countries. 

The Chinese chemical market is attracting huge foreign direct investments. Between 1993 and 2003, investment projects amounted to around EUR 20 billion of contractual FDI, with Bayer, BASF, Shell, and BP the four biggest investors. Over the last ten years, five percent of foreign direct investment was into the chemicals sector. Multinational corporations (MNCs) tend to enter via joint ventures partially driven by the need for feedstock access, but wholly foreign-owned enterprises will become more common following China s membership of the WTO. 

China is fast becoming the manufacturing powerhouse of the world. Thanks to its abundance of workers willing to labour for a small fraction of the wages earned by others in developed nations such as the USA and the European Union, China is capturing billions in foreign direct investment. 

N. Bajpai, and N. Dasgupta. Multinational Companies and Foreign Direct Investment in China and India, CSGD Working Paper No.2, January, 2004 (Downloadable from http //www.earthinstitute.columbia.edu/cgsd/ bajpai working papers.html). 

Since China s economic reform, numerous foreign companies have directly invested in industries in China. Many foreign corporations have established their positions in the Chinese market through joint ventures and/or wholly owned enterprises. Some foreign firms with multiple ventures in China establish holding companies to better coordinate their operations, marketing, raw material imports, product exports and other business issues. 

In the late 1950s, the volume of reported remittances dropped off sharply. Instead of paying remittances directly to relatives, expatriate Chinese invested heavily in both mainland China and in foreign joint ventures with the Peking government. The flow of remittances was capitalized in joint ventures with Peking, and relatives back home received dividends from these investments. 

---