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Have China¡¯s FDI Policy Changes Been Successful in Reducing Its FDI Regional Disparity?

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Author Info

  • Kang Yu
  • Xiangyong Tan
  • Xian Xin

    ()
    (College of Economics and Management, China Agricultural University Center for Rural Development Policy,China Agricultural University)

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Abstract

From the very beginning of China¡¯s open door policy in 1979, China¡¯s preferential FDI polices have generally favored the coastal provinces, which has led to a pronounced regional disparity in FDI. Since 1992, the Chinese government has implemented a series of polices to reduce FDI regional disparity and diversify inward FDI to Western and Central provinces. This paper uses a regression-based approach to assess the contribution of China¡¯s preferential FDI policy changes toward FDI regional disparity. Our results suggest that the contribution of China¡¯s regionally preferential FDI polices in inward FDI disparity decreased from 24% in 1990 to 13% in 2005. China¡¯s preferential FDI policy changes dominate all the other factors in reducing China¡¯s inward FDI regional disparity during this period.

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File URL: http://www.cau.edu.cn/cem/news/newsfj/2007E004.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by China Agricultural University, College of Economics and Management in its series Working Papers with number 0704.

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Length: 19 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:cau:wpaper:0704

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Keywords: Foreign Direct Investment; Regional disparity; Preferential Policy;

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