Shanghai Daily in May 2007:

The world’s fourth-largest economy has expanded by at least 10 percent for each of the past four years. Foreign direct investment in China rose 4.5 percent last year to a record of US$63 billion…Foreign direct investment has surpassed US$700 billion since China began accepting overseas’ investors money, Commerce Minister Bo Xilai said in March…

T C A Srinivasa-Raghavan in India’s Rediff News:

It has always been something of a mystery to me as to how China attracts such huge volumes of FDI, especially when the rate of return there isn’t very exceptional. I have, therefore, always believed that the data is dodgy. For example, when China tells you how much FDI came in a particular year, it counts the entire project cost, not just the FDI part of it.

Does this disparity between China and India, as reported by A.T. Kearney, make any sense: “China’s FDI flows are larger ($53.5 billion) and primarily capital-intensive, while Indian FDI flows are smaller ($4.3 billion) and skill-intensive, concentrated in information and technology areas.” Moreover, India’s efficiency of its invested capital is much higher than that of China. Given these factors, is it likely that FDI in China is 12x greater than that in India?

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