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Wiley InterScience

China & World Economy

China & World Economy

Volume 15 Issue 1, Pages 87 - 95

Published Online: 5 Feb 2007

© 2010 Institute of World Economics and Politics, Chinese Academy of Social Sciences



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China's FDI Net Inflow and Deterioration of Terms of Trade: Paradox and Explanation
Huizhong Li Professor 1 , Ping Huang 2 , Jialun Li 3
  1 Fudan University, Shanghai, E-mail: hzli@fudan.edu.cn;   2 Fudan University, Shanghai, E-mail: pingh329@163.com;   3 University of Hong Kong, Hong Kong, E-mail: julialee@hku.hk.
Copyright The official journal of The Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS) 2007
KEYWORDS
capital intensity • FDI net inflow • sectoral structure • terms of trade

Abstract

AbstractReferences

Starting from the contradiction between China's sustained growth in foreign direct investment (FDI) net inflow and deterioration of the terms of trade, this paper analyzes the characteristics of FDI sectoral structure since the 1990. Moreover, considering the international market competitive environment, this paper gives a concrete analysis of the influence mechanism and concludes that the flowing of FDI into labor-intensive export sectors caused the deterioration of China's terms of trade. To improve its terms of trade, China needs to direct FDI inflow into capital- and technology-intensive sectors and service sectors.

(Edited by Xiaoming Feng)


DIGITAL OBJECT IDENTIFIER (DOI)
10.1111/j.1749-124X.2007.00055.x About DOI

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