Susan Mays, Ph.D., contact Globex Faculty Fellow, Peking University; Faculty, The University of Texas at Austin China’s Economy: Technology, Growth, and Global Connections The Private Sector and FDI 北京大学工学院 PKU College of Engineering Globex

2 Agenda July Lecture: talent pool; foreign and private sector 1. Student presentations

3 Estimates of the size of China’s domestic and foreign private sector range from 50 to 70 percent Source: Yasheng Huang, Capitalism with Chinese Characteristics: Entrepreneurship and the State, 2008.

4 Chinese (?) private multinational enterprises and their foreign subsidiaries: an analysis Source: Lutao Ning and Dyland Sutherland, “Internationalization of China’s Private-sector MNEs: An Analysis of the Motivations for Foreign Affiliate Formation,” Thunderbird International Business Review, 2012.

5 Chinese (?) private multinational enterprises and their foreign subsidiaries: an analysis

6 Foreign Direct Investment (FDI), in BoP 1 (1) Data source: World Bank, see data.worldbank.org, “balance of payments” includes non-cash investments and commitments. Take off in FDI post 2008 crisis China had to: 1) lower tariffs, 2) allow foreign firms to sell directly to the Chinese domestic market, and 3) open the telecom and finance sectors to more foreign competition China’s leaders believed that foreign competition would further domestic reforms

7 China’s FDI/GDP ratio was high even with low per capital GDP Source: Rhodium Group, Hanemann and Bao, “A New Momentum for FDI Reforms in China,” 2013

8 China is relatively “restrictive” for FDI Source: Rhodium Group, Hanemann and Bao, “A New Momentum for FDI Reforms in China,” 2013

9 China’s outbound FDI is increasingly in developed economies Source: Rhodium Group, Hanemann and Bao, “A New Momentum for FDI Reforms in China,” 2013 Outbound FDI reached US$90B in 2013

10 China’s “restrictiveness” on FDI is higher in services, but overall it has decreased over time Source: Rhodium Group, Hanemann and Bao, “A New Momentum for FDI Reforms in China,” 2013

11 Yet, FDI in China has increasingly been in the service sector Source: Rhodium Group, Hanemann and Bao, “A New Momentum for FDI Reforms in China,” 2013