The impact of inward FDI on the performance of Chinese manufacturing firms

Using detailed cross-section data for 1995, non-Chinese MNEs are found to generate technological and international market access spillover benefits for Chinese firms, while overseas Chinese investors confer only market access benefits, State-owned enterprises reap no benefits, and indeed receive negative spillovers from overseas investors, in marked contrast to the positive spillovers gained by collectively-owned firms. These findings underline the importance of reform in state-owned enterprises to raise the absorptive capacity of the Chinese domestically-owned sector.