Understanding Japanese Direct Investment in China (1985-1993): An Intercultural Analysis

By Deng, Liping | The American Journal of Economics and Sociology, January 1997 | Go to article overview

Understanding Japanese Direct Investment in China (1985-1993): An Intercultural Analysis


Deng, Liping, The American Journal of Economics and Sociology


I

Introduction

Japanese direct investment (JDI) in China has a long and hectic history which could be dated back to the last decade of the 19th century. Its fortune and extent has been fluctuating violently ever since, and disappeared altogether after China was taken over by the Communist in 1949.(1) However, JDI has reemerged since the early 1980s when China adopted an open-door policy to attract foreign capital and new technology. in order to capitalize on the potential Chinese market and investment opportunities, Japanese investors have been in keen competition with those from Hong Kong, USA and European countries.

Starting in 1985, JDI experienced a steady growth. It ranked the third among all sources of foreign direct investment in that year (16.1%), behind those of Hong Kong (48.9%) and the USA (18.3%). This ranking remained the same in 1987, with a Japanese share of 9.4%. From 1988 on, JDI surpassed that of the USA becoming the second largest source of foreign direct investment. China's political instability in 1989 forced the Japanese to slow down its capital inflow to China. But the trend resumed and since then has been accelerated in the 1990s when China re-launched its reform program. By the end of 1993, the share of JDI was 9.2%, behind that of Hong Kong (56.2%) but ahead of those of USA (5.1%) and all European developed countries. Table 1 gives a description of JDI, by a comparison to direct investment from Hong Kong and USA.

There has been increasing interest in the issue of JDI in contemporary China, primarily from managerial, economic, social and political perspectives (Chou, 1994; Deng, 1994a,b). However, as demonstrated in many other areas of Japanese studies, it will be interesting and necessary to see how, and to what extent, some Japanese cultural elements may help to explain this phenomenon. This is the objective of this article. Within an intercultural comparative analytical framework, the contribution of Japanese cultural factors to the determination of the performance of JDI (relating to level, pattern, and managerial behavior) will be examined. The level of JDI refers to absolute volume and relative share by comparison to other foreign investment. The pattern of JDI refers to ownership structure, sectoral distribution and geographical disposition. The managerial behavior of JDI refers to corporative policy and organization structure, as well as functional areas such as production, marketing and human resource management. By combining cultural factors with economic, social and political explanations, a comprehensive understanding of JDI in China will emerge and some policy implications drawn.

Table 1

FOREIGN DIRECT INVESTMENTS IN CHINA: Percentage Shares, 1985-1993,
(US $10,000)

Year        Japan            Hong Kong            USA
        Amount    %        Amount    %      Amount    %
1985    31,507   16.1      95,568   48.9    35,719   18.3
1986    26,335   11.7     132,871   59.2    32,617   14.5
1987    21,970    9.4     159,821   69.1    26,280   11.4
1988    51,453   16.1     209,520   65.6    23,596    7.4
1989    35,634   10.5     207,759   61.2    28,427    8.4
1990    50,338   14.4     191,342   54.9    45,599   13.1
1991    60,592   13.1     257,911   55.3    33,066    7.1
1992    74,827    6.6     770,612   68.2    51,944    4.6
1993   239,412    9.2   1,462,492   56.2   132,717    5.1

Source: China's Statistical Yearbook, various issues, China's State
Statistical Bureau.

This article is based primarily on the author's field trips to China both in the winter of 1991 and the summer of 1994, during which aggregate data of JDI were collected and numbers of case analyses in four JDI-intensive areas (Dalian, Qindao, Shanghai and Fujian) were implemented. Section II suggests an intercultural analytical framework to understand JDI in China. Section III links Japanese cultural factors to the level of JDI. Section IV deals with the relationship between Japanese cultural factors and the pattern of JDI. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Understanding Japanese Direct Investment in China (1985-1993): An Intercultural Analysis
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.