China's Trade and FDI policy: Comparative Analysis

Period 1991-1996 1. Gradualism vs. Shock therapy Despite the bias of analysis caused by the different transition periods between China and Former Soviet Sates, and by different countries' characteristics, we believe that the rapid growth observed in China from 1978 and in Eastern Europe from 1991 is a concern of convergence process. This process makes up think that the steady state for Chinese and Eastern European economies could be achieved by providing solutions in rules and institutions in …

…expanding exports will relatively low local content, and a low level of value-added. Moreover, it has been associated will strong bias in favour of economic growth in the coastal regions (Lemoine, 1995 (d)). For these reasons, the Chinese authorities recently decided a new policy toward FDI that aims at limiting the development of the low value-added and labour intensive industries in the coastal areas, and at stimulating FDI into more basic industries in the inland provinces.