Round-Tripping Foreign Direct Investment in the People’s Republic of China: Scale, Causes and Implications
There is no doubt that part of the Foreign Direct Investment (FDI) inflows to the People’s Republic of China (PRC) belong to the return of Chinese capital that has gone abroad to escape foreign exchange controls.
The World Bank and other agencies and experts have estimated that the scale of this round tripping could be as high as a quarter of the total FDI inflows into PRC (see World Bank 2002). But the World Bank did not provide clear definition of round tripping FDI and did not explain its estimation method.
This paper attempts to fill this gap in the literature by providing an estimation of the overall scale of PRC’s round tripping FDI with detailed description on the methods and assumptions. The paper also clarifies a few conceptual issues related to the different types of round tripping FDI and their measurement problems.
Note: This is a revised version of the June 2004 paper. It was published 10 December 2004 and incorporates some adjustments to the methodology. Although some points of detail have changed, the broad conclusions remain the same.
The December 2004 online discussion paper was published as an online and hard copy Research Paper without alteration to the text. A shorter version was also published in January 2005 as an online and hard copy Policy Brief.
Download this Discussion Paper [ PDF 535.5KB| 48 pages ].
Post a CommentWe welcome your feedback on this publication. Post a comment. ADBI is not obliged to acknowledge or publish comments and may abridge or edit them before web posting. Comment(s)
There are [1] comment(s) for this entry. Post a comment. - kundan singh
(posted 04 September 2006 / 10:10:07 AM)
Thank you for this paper on round tripping. I am currently writing my masters thesis on the reasons for growth of fdi in China and India. Round tripping plays a part in the limitations of this research. The information has been useful in my thesis.
Thank you
Kundan Singh
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The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.
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