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Foreign Direct Investment in China's High‐technology Manufacturing Industries

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  • Mary E. Lovely
  • Zixuan Huang

Abstract

This paper provides a survey of foreign investment activity in China's high‐technology manufacturing industry. In addition, we closely examine the relationship between industrial policy, foreign investment and China's high‐technology export success using the development of an indigenous integrated circuits industry as a case study. This paper finds that China's efforts to raise the productivity and innovative capacity of indigenous enterprises is consistent with rising domestic shares of high‐technology assets and profits. Nevertheless, foreign‐funded enterprises remain the source of most high‐technology manufactured exports, primarily from wholly foreign‐owned firms. In sum, despite indigenous development, Chinese high‐technology manufacturing and exports remain deeply tied to foreign investment.

Suggested Citation

  • Mary E. Lovely & Zixuan Huang, 2018. "Foreign Direct Investment in China's High‐technology Manufacturing Industries," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(5), pages 104-126, September.
    • Handle: RePEc:bla:chinae:v:26:y:2018:i:5:p:104-126
    DOI: 10.1111/cwe.12258
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    References listed on IDEAS

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    6. Gu, Weishi & Awokuse, Titus O. & Yuan, Yan, 2008. "The Contribution of Foreign Direct Investment to China's Export Performance: Evidence from Disaggregated Sectors," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6453, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Kerry Liu, 2020. "Hong Kong: Inevitably irrelevant to China?," Economic Affairs, Wiley Blackwell, vol. 40(1), pages 2-23, February.
    2. Alexandre Repkine & Dongki Min, 2020. "Foreign-Funded Enterprises and Pollution Halo Hypothesis: A Spatial Econometric Analysis of Thirty Chinese Regions," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    3. Long, Yingzi & Cai, Dapeng, 2023. "Why do governments subsidize R&D-Intensive foreign direct investment?," Economic Modelling, Elsevier, vol. 129(C).

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