abhishreshthaa
Abhijeet S
COMPLICATIONS FACED BY CHINA DUE TO INCREASED FDI
On the competitiveness side, it is seen that increasingly, the gains of Chinese economic growth have gone to foreign firms. the Chinese balance of payments statistics indicates that in the mid-1990s, the foreign income repatriations were only about $6 billion. Today, they are about $30 billion.
This is a capital outflow from the current account. Some of that money comes back in the capital account through reinvestment, but, over the long run, the trend of increasing capital repatriations has been dramatic.
A lot of the gains from economic growth have gone to foreigners rather than Chinese entrepreneurs.
Today, with the FDIs on a constant rise, India is not too far away from facing a similar problem as China in this regards.
On the competitiveness side, it is seen that increasingly, the gains of Chinese economic growth have gone to foreign firms. the Chinese balance of payments statistics indicates that in the mid-1990s, the foreign income repatriations were only about $6 billion. Today, they are about $30 billion.
This is a capital outflow from the current account. Some of that money comes back in the capital account through reinvestment, but, over the long run, the trend of increasing capital repatriations has been dramatic.
A lot of the gains from economic growth have gone to foreigners rather than Chinese entrepreneurs.
Today, with the FDIs on a constant rise, India is not too far away from facing a similar problem as China in this regards.