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.
• A very different take on a familiar and important topic • The author's conclusions hold enormous policy and analytical implications • Addresses an extremely timely topic as China is joining the World Trade Organization
List of tables and figures; List of abbreviations; Synopsis of the book; Preface; 1. Introduction; 2. An analytical framework; 3. Problems in China's corporate sector; 4. Constraints on nonstate firms and foreign direct investment; 5. State-owned enterprises and insolvency-induced foreign direct investment; 6. Economic fragmentation and foreign direct investment; 7. Conclusion; Bibliography; Index.
'Professor Huang is fast becoming one of the most influential voices in the American academy on the subject of the Chinese economy. This is a book that will have a major impact on scholars and indeed on investors, and maybe even on China itself. It will surely change the way that contemporary Chinese political economy is studied and taught in universities.' William Kirby, Harvard University
'A fresh and fascinating perspective on the role of foreign investment in China. Huang counters the praise common in discussions of Chinese development by arguing that high levels of foreign investment arise, in part, from the failure of the Chinese state to allocate domestic savings efficiently. The book is sure to provoke debate over Chinese development model as the country moves toward full membership in the World Trade Organization.' Susan Rose-Ackerman, Yale University
'Professor Huang's innovative work over many years on the role of foreign direct investment in China's economic development is distilled and elaborated in this book. He provides a novel, carefully documented, and rigorously argued analysis which carries with it important implications both for scholars and policymakers concerned with China's continued economic reform efforts.' Charles Wolf, Jr, Rand Corporation
'Yasheng Huang's book is a very important and significant contribution on the issue of foreign direct investment (FDI) in China, and FDI in general. … an outstanding contribution … good example to students in that if one is motivated to understand and explain the world around us, good questions and simple analytical tools can take us a long way.' Economic and Political Weekly
'… excellent … a refreshing and provocative perspective …' Political Studies Review
'… a fascinating and comprehensive story … this is a hugely impressive volume and an important addition to the literature on China's reform strategy and its relations with the global economy. It has a multitude of strengths: a wealth of well-deployed statistics, serious case-studies of firms, a questionnaire survey organized by the author and a Beijing University research centre, and above all an intelligent, logical and innovative argument … this volume surely makes Huang one of the world's most authoritative political economists currently writing on China.' International Affairs
'A highly original and insightful analysis which debunks many conventional wisdoms about FDI 's role in China's development. Huang demonstrates why a substantial part of the colossal FDI inflows since the early 1990s is more readily explained by deficiencies in China's institutions and domestic financial intermediation, than by the attractiveness of its investment regime. He points out that much FDI went into traditional labor-intensive industries in China, often sidelining private domestic entrepreneurs. He also shows how FDI influenced China's broader reform strategy and process in positive ways. Indispensable reading for the serious student of China's economic transition.' Pieter Bottelier, former representative of the World Bank in China and adjunct lecturer at Kennedy School of Government, Harvard University
'At a time when many look to China as a model of economic development, Yasheng Huang asks the hard question: is $50 billion in annual foreign direct investment really a sign of unqualified success? Selling China argues that China not only gets more direct investment than any other developing country, but that it is dependent on it because its own financial sector is sickly, leaving billions in Chinese savings idle while billions from across the seas are invested at higher cost. Students of China's economic development - and what it means for the 100 poorer nations looking to follow its lead - will read Huang's careful analysis for its logic and scholarship, and because it is the best available quantification of the size and meaning of foreign investment in China. Business managers, bankers and money managers who think of foreign investment as reassurance will read this book with sobriety, and be better prepared to succeed in the next phase of Chinese economic reformation as a result. Chinese leaders themselves will read this powerful book; but will they be able to address the often politically rooted problems documented by Huang? China's political transition, not just economic growth, rides on the answer.' Daniel Rosen, Institute of International Economics, Washington DC
'Selling China delivers its key messages by combining well documented data, solid econometric analyses and first-hand interviews … For readers who wish quickly to gain insights into the FDI experience in China, or for serious scholars who have a sustained interest in reviewing the exact nature and impacts of FDI in China, this work is a book to be read for its rigour and entertainment.' Yong Zhang, Transnational Corporations
'… Yasheng Huang offers the reader a fresh analysis of China's economic reforms throughout the 1990s. … The rigorous clarity of exposition in Huang's work deserves the highest praise.' China Perspectives
'… an important contribution to understanding not only FDI in general, but its role in China in particular. … well researched …a pleasure to read … one of the most detailed accounts of FDI in China I have ever read. … an outstanding book, which I thoroughly recommend to academics who wish to gain a fuller insight into overall global development as well as its specific applications in China. I look forward to Huang's next book.' The Copenhagen Journal of Asian Studies