Source: WTO and UNCTAD.
China experienced a fast integration to the global economy and became one of the world’s leading manufacturing centers. This integration was facilitated through Foreign Direct Investments (FDI), bringing capital, technology and access to foreign markets. FDI inflows boomed in the early 1990s when China purposefully debased its currency from about 3.7 Yuan per US dollar to 8.3 Yuan per US dollar. This jointly made foreign investment more attractive as well as exports cheaper in foreign currencies. The first surge in FDI enabled the setting of modern manufacturing and transport infrastructures along the coast of China with the formation of large manufacturing clusters (e.g. Pearl River Delta, Shanghai).
The outcome was an export-oriented manufacturing system, centered around development zones, and a spectacular growth of exports from the late 1990s. By 2007, China was the world’s second largest trader, surpassing the position held by the United States and Japan for decades. This FDI / export growth synergy substantially increased the demand for international transportation and port development along the Chinese coast which is correlated with the ongoing growth of FDI inflows. By the mid-2000s, as the Chinese economy was maturing, it started to be a provider of FDI with a sharp increase in outflows. These outflows mostly went into the acquisition of foreign firms to help Chinese firms expand their branding and market reach as well as resource and infrastructure development projects.