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