A report regarding the attractiveness of alternative countries Research Paper

A report regarding the attractiveness of alternative countries - Research Paper Example China is a country with where cheap labor is easily available giving a cost advantage to the companies investing. (Diego Quer, 2008) Moreover, China is largely a buyer’s market keeping in mind the country’s population of 1.3 billion people. And with time there is an expectation that the purchasing power of Chinese residents is likely to increase sharply because of the lower rates of inflation and a good annual GDP growth rate of 8 % for the country. To top it all China’s government recently has eased down the regulations and laws concerning foreign investment in China. As a result of these incentives a lot of companies invested in China and as according to research FDI flows into china were of about 83.5 billion dollars which grew to 108.3 billion in 2008 with continued investment announcements and a positive investor outlook. (Jianhong Qi, 2008) The trend of FDI in China has changed since 2001 after it joined WTO. Since then until now foreign investors who have invested in China have formed companies entirely owned by foreign capital. Other than industry and hi-tech foreign investment is also allowed in the financial services, insurance and banking sectors.