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Chasing the Dragon: Will India Catch Up with China? by Mohan;Singh Guruswamy, Zorawar Daulet

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5

China as a Manufacturing ‘Hub’:Intra-East Asian Geo-Economic Dynamics

It is now well-recognized that one of the most striking consequences of inward-manufacturing FDI has been the emergence of China as an integral link in global production value chains.1 Thus, FDI and trade are intertwined in China's economic story. According to a recent report, ‘World Investment Prospects to 2011’, China's FDI inflows are projected at US$ 87bn per year for 2007–11. China is expected to rank third globally, behind the USA and the UK. China's projected share of global FDI inflows of 6 per cent in 2007–11 would be equal to its share in 2002–06.2 It is also worth noting that ‘vertical-intra-industry-trade-(VIIT) oriented FDI’ in East Asia (including China) has ...

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