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Chinese Foreign Direct Investment
Transcript of Chinese Foreign Direct Investment
What is Foreign Direct Investment?
Investment from one country directly into another.
Government determines what goods should be produced and at what price.
FDI increases China's economy
Satisfies China's thirst for expansion
High-tech industry = skilled laborers
"By allowing foreigners to invest in assets in our country, do we help ourselves in the long-term or do we mortgage our future and surrender our sovereignty?" Don Brash, economist
Poor working conditions
Outflow Direct Investment
Where does China invest today?
Africa, Australia, & South America
Planning for a sustainable future
FDI will continue to grow.
1. China's "thirst for expansion"
Reasons to Invest in China
Market potential; people need your goods
Stable political climate; always been Communist.
Special Economic Zones
Inflow FDI: Money that non-residents invest in others in foreign economies.
Location is far from Beijing to "minimize potential risks and political interference" (Zeng)
“They complain about military-style drills, verbal abuse by superiors and “self-criticisms” they are forced to read aloud, as well as occasionally being pressured to work as many 13 consecutive days to complete a big customer order — even when it means sleeping on the factory floor.”
- Barboza, "After Foxconn Suicides, Scrutiny."
Put up suicide nets after multiple suicides
Typical Foxconn dormitory
By: Kathryn Chesebrough
Inflow Direct Investment in China
Trash hill in Shenzhen
Economic Reforms under Deng Xiaoping
Agricultural & Economic liberalization
“At Foxconn, Mr. Ma shared a dormitory room with nine other workers, ate in the campus cafeteria and worked night shifts, 7 p.m. to 8 a.m. His sister said he did little but work and sleep, had no friends on campus and did not even know the names of most of his roommates.”
The New York Times reported that “in Shenzhen workers’ dormitories, frustration with hard labour, merciless factory bosses, low pay and miserable living conditions is palpable.”
"Child workers were subject to a number of legal violations, including not being given formal labor contracts, working 12 hours per day, not receiving overtime pay. " - Childlaborwatch