In this book, Yasheng Huang makes a provocative claim: the large absorption of foreign direct investment (FDI) by China is a sign of some substantial weaknesses in the Chinese economy. The primary benefits associated with China's FDI inflows are concerned with the privatization functions supplied by foreign firms, venture capital provisions to credit-constrained private entrepreneurs, and promotion of interregional capital mobility. Huang argues that one should ask why domestic firms cannot supply the same functions. China's partial reforms, while successful in increasing the scope of the market, have so far failed to address many allocative inefficiencies in the Chinese economy.
Yasheng Huang is Associate Professor at the Sloan School of Management, Massachusetts Institute of Technology. He formerly taught at the Harvard Business School. Professor Huang is also the author of Inflation and Investment Controls in China (Cambridge University Press, 1996). He is a recipient of the Social Science Research Council - McArthur Foundation Fellowship.