The Inflow of Foreign Direct Investment in Real Estatr Development in China:Contribution to Economic Development

摘要

Foreign Direct Investment (FDI) is a form of capital inflow that has been widely researched. Incertain literature this term is used interchangeably with Multinational Enterprises (MNE). Someinternational trade researchers have described an MNE as a firm that engages in FDI withcontrolling interests in a foreign firm or with subsidiaries in foreign countries. The economy ofChina has attracted a lot of attention in 2000 as the GDP passed USD 1 trillion USD, and wasUSD 3 trillions in 2008, this being the first in history. In 2009, China become the second largestFDI recipient in the world, after the United States, and the largest host country amongdeveloping countries. In the case of the inflow of real estate, it has contributed enormously toeconomic development of China, through the provision of shelter, creation of employment aswell as other benefits such as partnerships between local and foreign companies in the industry,since the opening of China's doors in 1978. This research looks at how real estate has seengrowth since then, by looking at data trends of the inflow of FDI during the years of 1978-2009.The research was conducted using secondary data mainly from China Statistical yearbooks fordata analysis and comparisons of real estate in previous years, before WTO (1978-2001) andafter (2001-2009) these results provided a solid basis for establishing whether real estate hassignificantly contributed to the development of the economy of China. Data was presented andinterpreted in tables and charts. The results indicate that China has seen a lot of benefits frominvesting in the real estate industry as figures of FDI inflow have increased over the years,particularly from the late 1990's, when new and better housing reforms were introduced, seeingtremendous increase in housing provision, employment. Some of the challenges have beenovercome, however there is still more room for growth. Some need more strategic ideas, such aslack of land which is a major challenge in the over populated country.