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Global Competitiveness and Foreign Direct Investment (FDI)

Global Competitiveness and Foreign Direct Investment (FDI)

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Running Head: GLOBAL COMPETITIVENESS AND FOREIGN DIRECT INVESTMENT 1

Global Competitiveness and Foreign Direct Investment (FDI)

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GLOBAL COMPETITIVENESS AND FOREIGN DIRECT INVESTMENT (FDI) 2

Global Competitiveness and Foreign Direct Investment (FDI)

It is evident that the world nowadays has been turned into a global village because of

the enormous technological advances, which has led to global competitiveness between

companies. Global competitiveness has led to many companies to venture into international

business whereby they have opened branches in various countries worldwide. Global

competitiveness has also led to these companies establishing their doing-business strategies

to cater for the humongous opportunities presented in international business (Nicholls, 2012).

On the other hand, FDI (Foreign direct investment) refers to an investment into business or

production, which is normally direct in a particular country by a company or an individual of

another country. Foreign direct investment is normally done through purchasing a company

in that target country or through a company expanding its operations of a business, which

already exists in that country (Schwab, 2012). This study will expound on the effects of FDI

in China and South Africa.

FDI effects in China

China is notably among the fastest growing economies in the world currently. China’s

impressive and prosperous economic growth has greatly assisted the country to attract huge

amounts of FDIs and this in turn increased its productivity particularly in its economy’s

export manufacturing sector. FDI has also largely fuelled China’s growth through increased

tax revenues, skill and technological transfer, export promotion, and capital formation. In

addition, the creation of China’s large growing middle class, increased infrastructure as well

as economic reforms encouragement has continued to attract FDI inflows into China and this

has led to China’s increased growth in its economy (Jiang, 2003).

FDI plays an integral and extraordinary function in the growth in global business and

FDI has continued to fuel China’s economic growth through creation of employment,

attraction of capital investments, and increased manufacturing exports. Other integral factors

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Global Competitiveness and Foreign Direct Investment (FDI) Name Institution Global Competitiveness and Foreign Direct Investment (FDI) It is evident that the world nowadays has been turned into a global village because of the enormous technological advances, which has led to global competitiveness between companies. Global competitiveness has led to many companies to venture into international business whereby they have opened branches in various countries worldwide. Global competitiveness has also led to these companies establishing their doing-business strategies to cater for the humongous opportunities presented in international business (Nicholls, 2012). On the other hand, FDI (Foreign direct investment) refers to an investment into business or production, which is normally direct in a particular country by a company or an individual of another country. Foreign direct investment is normally done through purchasing a company in that target country or through a company expanding its operations of a business, which already exists in that country (Schwab, 2012). This study will expound on the effects of FDI in China and South Africa. FDI effects in China China is notably among the fastest growing economies in the world currently. China's impressive and prosperous economic growth has greatly assisted the country to attract huge amounts of FDIs and this in turn increased its productivity particularly in its economy's export manufacturing sector. FDI has also largely f ...
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