Business Skills & Employability Essay Example | Topics and Well Written Essays - 2000 words

Business Skills & Employability - Essay Example In order to understand the reason behind the huge inflow of FDI in China, the areas of economic reforms need to be studied in context to China, the policies framed by the government in relation to the foreign direct investments in China. The favorability of the investment climate of China in the eyes of the foreign investors need to be studied by considering the several factors that affect the inflow of foreign direct investments in the country. The analysis of the quality of infrastructure available in China for the foreign direct investments, the availability of the manpower resources in China, the regulatory framework and the laws in various sectors for foreign investment are important to understand the reasons why China has been able to attract huge inflow of foreign direct investments over the last three decades. Discussion The reasons behind China’s ability to attract huge foreign direct investments in the country over the last 30 years have been discussed as follows. Th e alternative investment patterns that have emerged in order to challenge rapid growth rate of foreign direct investments have also been included as part of the discussion. ... ina’s ability to attract huge foreign direct investments in the country are the availability of favorable infrastructure for the foreign investors, the high potential of the manpower resources and the total factor productivity of China, the policies of the government in framing favorable laws and regulations for the foreign investors and the performance requirements of the foreign investors. A picture of the growth of foreign direct investments in China has been represented below in Table 1. Table 1: FDI Inflows ($US) in China from 1983 to 2012 The above data have been plotted in graphical form as represented in Figure 1 as shown below (The World Bank, 2013, p.1). Figure 1: Increasing Trend of FDI Inflow ($US) in China from 1983-2012 The policies framed by the government in China have been established in such a way over the last three decades that the regulatory framework has been viewed favorably by the foreign investors in China. The government has set up separate laws by cl assifying the foreign investors into categories like wholly owned foreign enterprises, joint venture of the foreign enterprises and the Chinese entities and Sino-foreign co-operatives. The People Republic of China maintained a Guiding Directory for the investors who are looking for foreign investments in China. The policies framed by the government offer provisions for incentives in case of foreign investments in the special economic zones as designated by the People’s Republic of China. Although in the initial stages, the People’s Republic of China had imposed performance requirements for the foreign investors, the policies on foreign direct investments were instituted with an object to provide preferential treatments to the foreign investors who invested in the economy of China. The