Conclusions

Exports and foreign direct investment (FDI) in China have increased dramatically since the 1980s. This book has investigated the impact of exports and FDI on Chinese economic development since the economic reforms in 1978, with emphasis on transmission mechanisms. In the main, the book argues that exports have primarily served as a ‘vent-for-surplus’ rather than as a driver of productivity growth for China. The gains from exports are significant, but the contribution of exports to long-term growth is not identifiably large. China’s exports and FDI have also been factors in the increasing regional disparities in the country. This is not only because the coastal regions enjoy greater export and FDI-induced growth, but also because of limited linkages generated by the engines of economic growth. The study suggests that trade liberalization can lead to economic development provided that several preconditions are met and that transmission mechanisms are effective. Thus, in order to achieve long-term sustainable growth that promotes both equity and efficiency, complementary policies and reforms will be required to improve transmission mechanisms and limit negative effects. This chapter summarizes the major findings of the study and discusses the policy implications.