View
218
Download
0
Category
Tags:
Preview:
Citation preview
doc. Ing. Tomáš Dudáš, PhD.
China – Basic Information1,33 billion inhabitantsGDP –13,39 billion USD (PPP)GDP/c – 9 800 USD (PPP)GDP growth in 2013 – 7,7 %Labor force – 797,6 millionSector employment – 33,6-30,3-36,1Unemployment – 6,4 %????Poverty – 13,4 % of the population live
below the poverty line
China – important milestones1949 – The creation of People’s Republic of
China
1946-1976 The reign of Mao Zedong, which could be described by very strict communist policies
1978 – The start of economic reforms
1989 – Tienammen square massacre
2001 – China’s WTO accession
FDI in China after 19781978 – bad economic conditions (dual
society, where the urban population had 3x higher income than the rural population)
Economic pragmatism – the ideological background was not important
Gradualism – slow and gradual changes
1978 – law about joint ventures
FDI in China after 1978 1980 – the creation of 4 special economic zones –
Shenzen, Zhuhai, Shantou and Xiamen 1984 – 14 coastal cities were opened to the
foreign investors The government continued to add more special
economic zones, export processing zones and technological parks
Main problem – the Tienammen square massacre, but the FDI begun to grow dynamically in 90s
Up to 2000 China received FDI in amount of 395 billion USD in more than 363 thousand projects
From 1985 – 85 % of the FDI received came into the special economic zones
FDI in China after 1978Before 1990 the major part of the FDI
originated from Chinese living abroad (Between 1976 and 1996 57 % of the FDI inflow originated from Hong Kong and Macao)
Current estimates - HK a Macao 40%, USA 11%, EU 11%, Japan 8%, ASEAN 8%, Taiwan 6%, Other 16%
Some problems with the identification of the origins of the FDI
Problem – the dominant position of eastern China that received up to 2000 around 87 % of the total FDI
12
Most important investors in China in 1979-88 and 2008 (%)
0.5
0.6
0.6
0.6
0.7
1.1
1.9
4.7
8.5
70.8
France
Canada
United Kingdom
The Netherlands
Spain
West Germany
Singapore
Japan
United States
H.Kong/Macao
%
2008: US$ 92.4 B
%
1.6
2.1
2.8
3.1
3.4
3.5
4.0
4.8
17.3
44.4
Mauritius
Taiwan
Western Samoa
United States
South Korea
Cayman Islands
Japan
Singapore
British Virgin Islands
Hong Kong
%
1979-88:US$ 28.4B.
Sectoral structure of FDI inflows between 1976 and 2000
Agriculture – 1,5 %
Industry– 58,7 %
Services– 39,8 %
14
Main types of FDI in 2006 and 2008
0
10
20
30
40
50
60
70
80
% of Total
2006 23 3 74 1
2008 19 2 78 1
EJVs CJVs WFOEs FISVs
EJVs = equity joint ventures; CJVs = cooperative joint ventures; WFOEs = wholly foreign-owned enterprises; FISV=Foreign invested shareholding
ventures. See Glossary at the end of this file.
The main factors of the FDI inflows
Large internal market with growing purchasing power
Low cost labor force (approx. 1/3 of the costs in Mexico and 1/20 of the costs in USA)
Growing labor productivityGenerous state support of FDI inflows
(financial incentives, infrastructure, special economic zones)
Impact of the FDI inflows on the Chinese economyFDI inflow supports GDP growth – 1 %
increase in the FDI inflows leads to 0,05 % of GDP growth
Economic analyses show that currently FDI inflows contribute to the GDP growth by more than 20 %
Export growth – from 10 bln. USD in 1978 to 125 bln. in 2000
Companies with foreign ownership have a 50 % share on the total exports
The export structure of the companies in foreign ownership is more modern than the export structure of the domestic corporations
Impact of the FDI inflows on the Chinese economy In 1995 corporations with foreign ownership
employed around 10 million employees In 1998 it was already 17,5 millions and current
estimates are around 25-30 millions Analyses say that every 10 000 USD invested
created a new workplace FDI inflows had a huge positive impact on
China’s trade balance and currency reserves New technologies and managerial know-how The regions opened to foreign investors develop
very rapidly FDI played an important role in the fight against
poverty
Volkswagen in China – case study VW wanted to globalize the company, so they begun
the talks with the Chinese government in 1978 State owned enterprises dominated the Chinese
automotive industry those times (ex. FAW) – but low production
1978 – 55 assembly lines with an annual capacity of 150 thousand cars
In the early 80s the government made a decision – automotive industry should be one of the main pillars of the economy
1984 – Joint venture between VW and Shanghai Automobile Industry Corporation (SAIC)
VW invested 40 million USD in 1984 and 85 million USD more in 1985
Volkswagen in China – case study VW needed China because it had a weak position
outside Europe In 1985 the joint venture produced only 5 200 cars
(model Santana) – build from imported components The JV was profitable also for the Chinese partner –
SAIC was paying 18 800 USD for one car and was selling it for 37 600 USD on the market
1987 – the start of a new phase with more and more local subcontractors
1993 – production surpassed 100 000 cars per year Currently the competition on the market is very
strong – VW has to fight for its position on the market
Recommended