Professional Documents
Culture Documents
Exports
James Gordon
Presentation at IIFT
September 20, 2002
FDI and Exports
FDI in China
FDI in India
China vs. India
FDI in Korea
Implications for India
FDI in China
350
300 Cum. FDI
250
200 Exports
150
100
50
0 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
China. Exports by Type of Enterprise
1993-2001
(In billions of US$s)
140
120
100
80
60
Foreign/JVs
40
Domestic
20
0
1993 1994 1995 1996 1997 1998 1999 2000 2001
FDI and Exports
FDI in China
FDI in India
China vs. India
FDI in Korea
Implications for India
FDI in India
50
40 Exports
30 Cum FDI
20
10
0
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
China and India
Selected Economic Indicators
(In percent of own GDP)
1978 2000
China India China India
FDI in China
FDI in India
China vs. India
FDI in Korea
Implications for India
China and India. Foreign Direct
Investment Inflows, 1990-2001
(In millions of US$s)
50000
China
45000
India
40000
35000
30000
25000
20000
15000
10000
5000
US $ m illion Percent
US $ m illion Percent
80
60
40
20
0
1994 1995 1996 1997 1998 1999
FDI in China
FDI in India
China vs. India
FDI in Korea
Implications for India
UNCTAD Report, 2002
50
40 China
30 Korea
20
10
0
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Korea. Foreign Direct Investment and
Exports, 1982-2001
(In billions of US$s)
180
160
140 Exports
120
100 Cum FDI
80
60
40
20
0
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
FDI and Exports
FDI in China
FDI in India
China vs. India
FDI in Korea
Implications for India
Lessons from other Countries
UNCTAD report notes that countries with dynamic
export performance have used FDI to different degrees:
Hungary, Ireland and Mexico used FDI to leverage
preferential access to major market
China used size of domestic economy to reap
economies of scale and boost competitiveness. Also
established Open Economic Zones.
By contrast, Korea used domestic investment to build
world-class manufacturing sector.
Indian manufacturing faces well-known structural
constraints (infrastructure, power, labour laws, small
scale reservations). Current focus is on Special
Economic Zones (SEZs).
IMF Views on Export Promotion via SEZs
SEZs can provide facilities necessary to make exports
competitive and attract FDI. IMF 2002 Consultation
with India noted importance of:
SEZs establishing links with domestic enterprises
(technology transfer, boost productivity and skills)
Avoiding complex and over-generous SEZ incentives
Prudential control of offshore banking units (potential
conduits for short-term capital that could increase
vulnerabilities of domestic financial system)
Industrial countries opening up their own markets to
Indian exports
Source: India PIN, 2002 www.imf.org