World Bank2014-08-222014-08-222006-01https://hdl.handle.net/10986/19623China has been among the world's largest recipients of foreign direct investment (FDI). Nonetheless, at the time China is moving into its eleventh five-year plan period, four issues with FDI to China are becoming increasingly recognized by policy makers: geographic concentration, excessive reliance on investment in export-oriented manufacturing, under-investment in higher-technology industries, and heavy reliance on fiscal incentives to attract FDI. This report seeks to analyze these and provide benefit from international experience in suggesting policies. In addition to this introduction, the paper includes the following chapters: external environment, FDI in China, maintaining an attractive investment climate, leveling the playing field in taxation, improving the composition of FDI, and non-FDI capital flows liberalization and risk management.en-USCC BY 3.0 IGOACCELERATED DEPRECIATIONAGRICULTUREBANK LENDINGBIDBOND MARKETSBONDSCAPITAL INFLOWSCAPITAL INVESTMENTCAPITAL MARKETCAPITAL MOVEMENTSCOMMODITIESCOMMODITY PRICESCOMPARATIVE ADVANTAGECOMPETITIVENESSCREDIT MARKETSDEBTDEFLATIONDEVELOPMENT POLICIESDEVELOPMENT STRATEGYDOMESTIC ENTERPRISESDOMESTIC FIRMSDOMESTIC INVESTMENTDOMESTIC SAVINGDRIVINGECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC PROSPECTSECONOMIC REFORMEMERGING MARKETEXCHANGE RATEEXPORT PROCESSING ZONESEXPORTSFDIFINANCIAL SECTORFISCAL POLICYFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE RESERVEFOREIGN EXCHANGE RESERVESFOREIGN FIRMSFOREIGN GOVERNMENTSFOREIGN INVESTMENTFOREIGN INVESTORSFUELGDPGINI COEFFICIENTGLOBAL DEVELOPMENT FINANCEGLOBAL ECONOMYGOOD INVESTMENT CLIMATEGROWTH RATEHEAVY RELIANCEHOST COUNTRIESHOUSINGINCOMEINCOME TAXINSURANCEINTEREST PAYMENTSINTEREST RATESINTERNATIONAL FINANCEINTERNATIONAL FINANCIALINTERNATIONAL FINANCIAL MARKETSINVESTMENT CLIMATEINVESTMENT CLIMATESINVESTMENT POLICIESINVESTMENT PROMOTIONINVESTMENT RATESLIQUIDITYMACROECONOMIC MANAGEMENTMANUFACTURING SECTORMARKET ACCESSMONETARY POLICYNATURAL RESOURCESPORTFOLIOPRICE INCREASESPRIVATE CAPITALPRIVATE CAPITAL FLOWSPRIVATE INVESTMENTSPRIVATE SECTORPRIVATIZATIONPRODUCTION INPUTSPRODUCTIVITYPRODUCTIVITY INCREASESPROFITABILITYPROPERTY RIGHTSPUBLIC UTILITIESRAILRAILWAYSRISK AVERSIONRISK MANAGEMENTROADROADSSMOOTHING CONSUMPTIONSPECULATIONSUB-SAHARAN AFRICATAXTAX CODESTAX INCENTIVETAX INCENTIVESTAX RATETAX RATESTAXATIONTECHNOLOGY SPILLOVERSTECHNOLOGY TRANSFERTELECOMMUNICATIONSTRADE LIBERALIZATIONTRADE POLICIESTRANSPORTTRANSPORT INDUSTRYTRANSPORT INFRASTRUCTURETRANSPORTATIONVALUE ADDEDWAGESWTOYIELD CURVES10.1596/19623