Foreign Direct Investments and Sustainability: an empirical analysis through China's experience

Abstract

After China's economic reform and opening-up in 1978, an inflow of Foreign Direct Investment began, which increased exponentially over the years until a big expansion in the early 2000s to the present day, which greatly aids the country's economic growth. Following this great economic development and change in the Country brought about by FDI, the impact it had on the environment should not be underestimated: in fact, with the arrival of all these investments, the country has suffered serious repercussions in terms of pollution. In particular, the aim and objectives of this thesis are to analyse whether, in addition to the great economic growth benefit it brings, FDI can also bring benefits in terms of sustainability. Sustainability, in this research, is not only to be intended as ecological and environmental, but also economic and social. These three aspects are closely related to each other, in fact, with the presence of one of these aspects, it is more likely that all three will be present, allowing the Country to guarantee, through more effective practices and conduct over the long term, wellbeing for all citizens, that is essential. The first chapter of this thesis introduces generally the idea of FDI with a literature review on the topic; the second chapter deals with the topic of FDI with particular reference to China; the third chapter is the heart of the research and it is divided into three sections: the first section deals with the impact that FDI has on the Chinese economy, the second section analyses the impact of FDI on the environment and the last section the impact of FDI on society; the fourth and final chapter will be a review of the regulations and policies adopted by the government in order to see if sustainability, in general, is in the Country’s long-term plans.