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2 provides a summarized pictorial representation of the same. It reveals that FDI in the manufacturing sector in China contributes about 61 per cent of the total actual investment. The bulk of FDI in this sector appears to be dominated by intermediate technologies. The FDI in the service sector on the other extreme contributes about 23 per cent of the total investment. On the whole, the inflows of FDI in China appear to be highly export-intensive. 3 Occupational grouping of overseas Chinese sub-groups in Indonesia and Thailand Occupational grouping Hokkien Indonesia Rubber, copra, coffee, pepper, Rubber, rice, import/export tobacco, import/export, rubber & plastics, textiles, knitwear, weaving, garments, glassware, earthenware, tea processing, drugs, gold and jewelry, bicycles, trishaws, printing, hotels, entertainment, finance Chiu Chow Cantonese Import/export, clothing, rice milling, native products, dry goods, canned food, cosmetics, hardware, jewelry, distilling, publishing, furniture, entertainment, finance, insurance, Shipping Rice milling, lumber, machine shops, soap, bakeries, food canning, furniture, hardware, tailoring, photography, coffee shop, truck farming, poultry, restaurants, clothiers, piece goods, dry goods, printing, plastics, entertainment Hakka Taiwanese Thailand Machine repair, construction, food and beverage, printing watches/clocks, sugar Leather and hides, weaving, banking, department stores, metal working, shoe manufacturing, tailoring, hairdressing, truck farming Transportation, hotels, restaurants, electronics, paper, lumber, engineering production Hainanese Beverages, hotels, drugstore, furniture, hairdressing, fishing Yunnanese Jewellery Kiangsu & Chekiang Optical, clocks and watches, shoes, gifts, books Hupei Dentistry Shantung Piece goods Source: Based on Yuan li Wu and Chun-his Wu (1980), Economic Development in Southeast Asia: The Chinese Dimension, Stanford; Hoover Institution Press.

This may not satisfy the MNCs which have other options. This problem may be solved with the help of higher-productivity workers. It requires appropriate skills and early investment in education FDI: Global Trends and Assessments 13 and human capital formation. In general the LAC countries have not invested enough in human capital to be able to compete in manufacturing industries that require more skilled labour. Some simple maquila industries in Mexico and Dominican Republic are losing ground in such areas as textiles to low-wage producers in Asia or Central America.

A policy of ‘open door’ (Kaifang Zhenze) was formally adopted by the Central Committee due to the growing importance of foreign capital and advanced technologies to China’s own drive for modernization. At the second session of the fifth National People’s Congress in July 1979, the ‘Law of the People’s Republic of China on joint ventures using Chinese and foreign investment’ was adopted, granting foreign investment a legal status in China (Kamath, 1994). By 1980, four special economic zones (SEZs) had been established along the southeast coast – Shenzhen, Zhuhai, Xiamen, and Shantou.

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