Foreign Capital Investment

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. 

52 Plastics China Technologies, Markets and Growth Strategies to 2008 

The exodus of investment monies and jobs continues as OEMs abandon manufacturing plants in the USA and even Mexico, seeking lower costs to manufacture. Yes, it is about the money. Consumers, say manufacturers, want cheaper and cheaper products. It s true that less-expensive products are in greater demand, which helps OEMs build market share. To provide those products, manufacturers will continue to chase low-cost labour around the globe. Right now it s China, and manufacturers are finding compelling reasons to go. 

In the Chinese plastics industry, the largest foreign investors include Asahi, BASF, Borealis, BP, DuPont, Itochu, Lucky Goldstar, Chevron Phillips Petroleum and Shell. BASF has set up a joint venture, Yangzi-BASF Styrenics Co, with Yangzi Petrochemical Corp to produce expandable polystyrene (EPS). The plant is currently one of the largest petrochemical joint venture projects in China. BASF has also earmarked 

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Feils DJ, Sabac FM (2000) The impact of political risk on the foreign direct investment decision A capital budgeting analysis. The Engineering Economist 45 129-143... 

The support for the Foreign Capital Encouragement Law gave the Turkish pharmaceutical industry further momentum. Multinational companies such as Roche, Sandoz and Squibb started investing in Turkey. The Marshall Plan gave local companies such as Eczacibasi the opportunity to start investing in the pharmaceutical business. 

In addition to the influence of buyers, a number of other significant market factors influence demand. It is important to understand the operations of both domestic and foreign competitors, their rate of capacity utilization, and their products and services. In many markets, the dynamic interaction of supply and demand influences prices. Moreover, changes in capacity availability due to capital investment programs will influence supply and prices. A second important aspect of knowing the market is the need to determine price-volume relationships. 

Attitude toward private and foreign investment Tax rates (corporate and personal income, capital, withholding, turnover,... 

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. 

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