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Lewis turning point and China's FDI prospects

Yueqing Jia's picture

Comments

Submitted by Anonymous on
Increase in Chinese labor cost may, of course, hurt the market for low-value manufacturing production (and related FDI). In fact, according to a recent survey among 1600 German manufacturing firms, 20 percent said that they are planning to pull out from China due to cost-consideration. This said rising wage rates are supporting the appeal for China for market-seeking FDI. In 2009, more new cars were sold in China than in US, a fact that attracts foreign car manufacturers. So at the end, it is the composition rather than the value of FDI that might be changing. In addition, moving towards higher value-added manufacturing FDI has been part of the Chinese government's FDI strategy for the last few years. Dilek Aykut

Submitted by anonymous on
Dilek: Thanks for your comments and good example. And also thanks for your valuable advice and discussions which initiated this post. Yes, the trend of sector structure change of FDI flows to China in the near future is pretty clear. I am wondering whether the survey shows the destination of the shift of the investment. Will the withdrawal investments stay in the home countries or shift to other developing countries that have lower labor cost. I just landed China and will feel the Change here. Yueqing

Submitted by david on
I have noticed you publish an index of the level of Industrial production in China. I was wondering if I could kindly ask you the source or how is obtained or better if data is available. Regards, David

Thanks for your interest in this issue. I have passed your question to my colleague who work on the data. I will come back to you when I receive their reply.

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