Foreign Direct Investment in China and the Economic Integration of East Asia

Resorting to external financing is part of the policy of opening-up which has been adopted since the end of the 1970s by the Chinese Government. They have been giving preference, on the one hand, to the assisted loans (long-term and low-interest rates) that some countries and, above all, international institutions (the International Monetary Fund and the World Bank) have granted China and, on the other hand, to foreign direct investments. If at the beginning of the 1990s, international loans were a major part of the foreign capital introduced into China, foreign direct investments supplanted loans for the first time in 1992 with more than eleven billion dollars against less than eight billion in loans1.