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The impact of foreign trade and investment reform on industry location: the case of China

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  • Ting Gao

Abstract

The open-door policy adopted in China, through its preferential treatments that consistently favour south-east coastal provinces, has resulted in the geographic concentration of foreign trade and investment. This paper provides evidence at both the aggregate and disaggregate levels that the south-east coast of China experienced much higher rates of industrial growth during 1985-98, indicating a geographic shift in industry towards this region. Empirical results using provincial-level data show a clear positive link between inward foreign direct investment (FDI) and regional industrial growth, especially after 1991 when the volume of FDI took off. This implies a significant impact of China's foreign trade and investment reforms on industry location.

Suggested Citation

  • Ting Gao, 2001. "The impact of foreign trade and investment reform on industry location: the case of China," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 11(4), pages 367-386.
    • Handle: RePEc:taf:jitecd:v:11:y:2001:i:4:p:367-386
    DOI: 10.1080/0963819022000014276
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    References listed on IDEAS

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