《《week05a-foreign investment》.pdf

UGEC 1120B / GRMD 1033B Hong Kong and the Pearl River Delta Foreign Investment: Angel or Devil? Dr. Joanna Lee Dept. of Geography and Resource Management Current News…. Outline  Setting the scene: open door policy in China  Foreign investment in the PRD  Angel or Devil? I Open door policy Economic reform since 1978  Exchange with outside world  Attract investment  Transfer of technology and management skills The PRD is one step ahead of others Hong Kong is a key player Accession to the WTO (12/2001)  Further open up of markets  Fair and free trading among its members Chinas WTO entry will reshape the competitive landscape, but treaties alone wont alter the countrys idiosyncratic business culture … “When it comes to doing business in China, take your MBA books and throw them into the garbage. If you don’t have government on your side, good luck” China’s FDI inflows and global share  As a WTO member, investment flows into sectors which were previously closed (e.g. service sector)  Global manufacturer: cross border restructuring  Improvement in China’s investment environment  For 2003 (outbreak of SARS), China received US$54 billion worth of foreign direct investment (UNCTAD 2004). Source: Attractiveness of PRD  Historically, PRD is a forerunner of Chinese reform  A long history of manufacturing/industrial development  Strong ties to overseas Chinese  Attractive to Asian investors:  s