Exit Strategy?
WHEN Deng Xiaoping began opening China up to free-market economics and foreign trade in the 1980s, foreign companies were quick to take advantage of the opportunities that the PRC offered. The establishment of Special Economic Zones, beginning with Shenzhen in 1980, was the first of several incentives to demonstrate that China was now open for business. It all boded well for the future.
In many ways, much of that promise has been realized. From 2000-2010, around 20 percent of all foreign direct investment (FDI) was in China, accounting for roughly 2.5 percent of the country's GDP from 2005-2010. During the same period, foreign-invested enterprises were responsible for more than half of PRC imports and exports. As of 2010, they provided a third of China's industrial output and over a fifth of its industrial profits while employing just 10 percent of its workforce –– a demonstration of their high productivity.
