What makes china an attractive location for inward direct investment Essay

What makes china an attractive location for inward direct coronation by multinational enterprises - Essay ExampleThis object has incorporated over US $580 billion. The inward direct investment for China has grown with these developments in the economy. In 2007, foreign direct investments reached $83.5 billion. unlike outflows increased bring forward in 2008 and has grown steadily since. China went ahead to announce increased spinal fusion and acquisition deals to above one century and thirty mergers in 2008. Furthermore, merger and acquisitions in 2009 exceeded US $27billion. Chinas strength in the international investment lies its ability to remain consistent through economic downturns (Qu et al 2010). Foreign outflow and inflows in China has been notably stable despite persistent downturns on the global threshold. Most studies attribute development of the Chinese economy and its financial stability to foreign investments. More than fifty per cent of Chinese exports come from foreign connections, located within the country. Moreover, three hundred out of five hundred of the worlds largest companies, have extended their productivity schemes to China. These foreign firms alone employ approximately twenty quartet million workers within China (Green et al 2010). The data taken shows that over three quarters of Western, Japanese and other Asian multinational organizations move to Chinas domestic market (Urata et al 2006) Investors are especially attracted to China by low costs of labor and land. The Chinese labor force is among the largest in the world. It consists of over one hundred and four million in the productive sector. This number alone doubles the labor forces of Germany, US, Italy, Canada and Britain altogether. The Chinese market is also characterized by offer deficit besides the affable costs of land and available labor. China is endowed with resources such(prenominal) as minerals for example, aluminum, bauxite and oil that are useful in the inv estment process. The nations investment is similarly influenced by money supply and recent account balances. Countries seeking to attract foreign investment use such methods as these. The methods involve induction of incentives by reduced taxation on exportation to China, critical recommendations on technology and favorable loaning processes along with good infrastructure for telecommunication and dishonor purposes (Paprzycki et al 2008). Chinese inward investments by and large exceed those that are made outside the country. The country has also resulted in creating provision for its international bang-up for own foreign investments. Chinas overseas investments have been encouraged by overflow of resources and the countrys allegoric domestic demand. The countrys excessive capacity in production has led to sectors of the Chinese economy seeking international investment opportunities. This for the sake of further growth in such industries that bear an overflow. Furthermore, investm ents take advantage of quota free access to countries like the United States by investing directly through other nations such as Africa and Cambodia. otherwise nations have advantages such as location specificity and incentives (Wang, 2002). The United Kingdom for example provides with investment grants. Chinese foreign investments take advantage of this benefits. Investments by the Chinese firms is make by opportunities to gain knowledge on certain technologies. The Chinese foreign direct investment goes into other economies with the aim of obtaining technological knowhow. The technological knowledge subsequent applies in Chinas own production processes (Zheng, 2008). The Chinese government reinforces foreign investmen