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July 25, 2017, Beijing — The Chinese-language edition book launch for Developing China: The Remarkable Impact of Foreign Direct Investment was held in Beijing today. The book, written by Michael J. Enright, a leading expert on competitiveness, regional economic development, and international business strategy, uses China as an example to illuminate the mutually beneficial partnership between investing companies and host economies and offers a balanced and rigorous view of the full impact of foreign direct investment (FDI). The author Michael J. Enright, Hinrich Foundation’s management leadership, as well as representatives from government, enterprises, and the academic field attended the book launch event to share research findings and results highlights.

Michael J. Enright sharing research highlights in book launch event

The project of Developing China: The Remarkable Impact of Foreign Direct Investment was commissioned by Hinrich Foundation and undertaken by Enright, Scott & Associates. The English-language version of the book was released in September 2016, and the Chinese-language edition has now been launched in China under the joint efforts of Hinrich Foundation, Chinese Academy of International Trade and Economic Cooperation, MOFCOM, and the publisher, China Financial and Economic Publishing House.

Kathryn Dioth, Chief Executive Officer of Hinrich Foundation said, “Foreign direct investment is an essential ingredient for sustainable trading relationships between countries. The Foundation initiated this research program because it believes that FDI and FIEs contribute significantly more than mere capital inflows to an economy. We hope to explore all the ways in which a country can benefit from FDI and help companies better evaluate the value that they bring.”

In Developing China: The Remarkable Impact of Foreign Direct Investment, Professor Michael Enright adopted an array of methods, including econometric analysis, city and region case studies, and corporate cases studies, and introduced a new method—economic impact analysis, to assess the ripple effect of FDI and its operation through supply chains, distribution channels, and the spill-over effects that would not be otherwise recognized. The economic impact analysis shows the real benefit brought by foreign direct investment is beyond expectation.

Taking into account the direct impact of the investment, the operation of foreign invested enterprises, supply chains and the staff expenditure, the contribution to China’s GDP made by foreign investment and foreign invested enterprises is approximately 16%-34%, and that the contribution to China’s employment is approximately 11%-29%, from 1995-2013.

In addition, Professor Enright contended that, “FDI and FIEs have brought to China a whole range of catalytic impacts and spill over effects that are impossible to quantify. These include modernizing Chinese industries, supporting suppliers and distributors in China, bringing improved technologies and R&D to China, introducing modernized management training and education, and bringing regional and global management to China. FIEs have also raised China’s awareness towards the value of intellectual property, and the importance of innovation.”

Based on reviews of China’s Opening and Reform history, the book provides much value for reference. It reminds decision-makers that foreign investment has remarkable impacts on national development; it helps managers of foreign invested enterprises to make their case to their host economies; and it provides fresh angles to examine the impact of foreign investment. Qiyuan XU, Researcher from the World Economics and Politics Institute at the Chinese Academy of Social Sciences elaborates, “When China is actively pushing its Belt and Road Initiative, Developing China: The Remarkable Impact of Foreign Direct Investment showcases the positive impact of foreign direct investment on host economies, offering valuable reference for other developing countries handling relationships with foreign investment and foreign-invested companies.”

 

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Editorial Reviews

“The development of China’s economy has achieved a great success since the onset of its program of economic reform and opening. Foreign direct investment made a significant contribution to this success. This has been accounted by numerous works home and abroad. Professor Enright makes a comprehensive assessment on the achievements that China made in attracting foreign investment and the positive contributions of foreign investment to the development of China’s economy, with scientific and systematic analysis, with the innovative application of the economic impact analysis techniques, which is for the first time used in such kind of analysis, with typical corporate and city case studies, and with the tests on enlarged datasets and revised models based on existing econometric research. As said in the book, there are regional differences and time period differences in the impact of foreign investment on China’s economy. Foreign investment is important to China’s economy, in the past, at present, and in the future. Summarizing the past enables us to be better prepared for the future. China is deepening its reform in all aspects and expanding its open up scope. China’s usage of FDI also comes into a new development period. The Chinese version of this book, published at this moment, is of specific value for officials, business people, analysts, and others to read and to think.”

—Li Gang, Vice President, Chinese Academy of International Trade and Economic Cooperation, MOFCOM

 

“Developing China is the most comprehensive study of the role of foreign invested enterprises in China’s economic transformation available. It analyzes the evolution of government policy toward foreign investment and, more importantly, provides a path breaking analysis of the contribution of foreign firms to the growth of output and employment in China.”

—Nicholas Lardy, Anthony M. Solomon Senior Fellow at the Peterson Institute for International Economics

 

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About the Author

Michael J. Enright, a leading expert on competitiveness, regional economic development, and international business strategy, became the Sun Hung Kai Professor of Business at the University of Hong Kong in 1996 after six years as a professor at the Harvard Business School. He is also a director of Enright, Scott & Associates consultancy and a founder of The Competitiveness Institute. Professor Enright has consulted for companies, governments, and multilateral organizations in more than 30 countries on six continents on international business strategy, competitiveness, regional clustering, technology policy, and economic development; has appeared in 40 countries as a featured speaker; and has authored numerous books and monographs on international competitiveness and China’s development.

 

About Hinrich Foundation

The Hinrich Foundation undertakes and initiates research on global trade and investment issues. Its goal is to promote open, fact-based dialogues about global trade with the aim of encouraging balanced, more informed decision-making on the part of government, business and civil society.

 

For more information, please contact

Mr Stephen Olson

Research Fellow

Hinrich Foundation

[email protected]

 

Laura Liu

Director

North Head

[email protected]