Investment for development

Conference on Foreign Investment in China's Regional Development


11/12 October 2001 - Xi'an, China

This conference was organised in co-operation with the Chinese Ministry of Foreign Trade and Economic Co-operation [] as part of the ongoing OECD-China policy dialogue and co-operation on investment issues.

China is a country where regional development is of a foremost priority given that rural regions are inhabited more than 900 million people, two-thirds of the population. Since the launch of the economic reforms in 1978, China's dominant development policies have gradually shifted from being based on self-reliance to being based on comparative advantage and an open door policy.

A large amount of existing FDI has been located in China's relatively prosperous coastal regions, without any significant catching up by the interior central and western regions. Chinese leadership is keen on redressing this growing imbalance in regional distribution of FDI. The new "Great Western Development" or "Go West" Campaign, launched last year and embodied in the next five-year plan (2001-2005), is an ambitious top-down effort to steer state investment, outside expertise, foreign loans and private capital into the parts of China most in need but least likely to attract aid on their own.

The two-day discussions covered the following topics:

  • what lessons can be learned from FDI in the coastal regions; how different international experiences with regional development could relate to China;
  • which development strategies would be necessary for the special situation in the Central and Western regions and what role FDI may play in these;
  • what role government may play in order to support such a development process - case histories from China and other countries;
  • what preconditions the central/western provinces will have to meet in order to attract substantial FDI flows (including the establishment of subsidiaries of foreign-invested enterprises located in the coastal belt); and
  • how best to capture the benefits of FDI through linkages with local enterprise development, both in China and other countries.

The conference brought together representatives of the OECD Member countries, non-Members, China's central and provincial government officials and experts from China, other multilateral/bilateral organisations that provide assistance and loans for regional development projects in China including the World Bank, the Asian Development Bank, as well as the European Commission, UNCTAD, and private sector representatives including interested members of the Business and Industry Advisory Committee to the OECD.

Conference Documentation

  • Conference Conclusions
  • Agenda
  • Press Release
  • Issues Paper
  • FDI and Regional Development: Assessment and Prospects for China , Bernard Hugonnier
  • Best Practice Guidelines for Investment Promotion , David Banks
  • Regional Disparities and Trade and Investment Liberalisation in China , OECD
  • Improving Investment Promotion in Western China , Andrew Proctor
  • Lessons from Brazil's Regional Development Programs , Alfredo Lopes Neto
  • UNIDO Investment and Technology Promotion
  • The New Regional Patterns of FDI Inflow: Policy Orientation and Expected Performance , Jiang Xiaojuan
  • Facilitating Sustainable Investments with Local Enterprise Development in China , Philippe Bergeron
  • Southeastern Turkey: Sustainable Development and Foreign Investment , Olcay Unver
  • What Type of FDI for the Chinese Hinterland , Peter Kreutzberger


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