It is now receiving wide attention that since the adoption of the open-door policy at the end of the 1970s China has been extremely successful in attracting foreign direct investment (FDI). Particularly, according to UNCTAD's World Investment Report 1997: Transnational Corporations, Market Structure and Competition Policy, China has become the second largest recipient of FDI in the world since 1993, after the United States. On the other hand, however, it seems less noticed that China has also become a growingly important FDI exporting country. According to UNCTAD's same report, China now ranks as one of the largest outward investors among developing economies in the 1990s. By the end of 1996, the cumulative stock of Chinese outward FDI had reached over $18 billion, next only to Hong Kong ($112 billion), Singapore ($37 billion) and Taiwan ($27 billion). Consequently, China increased its share in world-wide FDI outflows from less than 0.5 per cent until 1991 to an average of 1.3 percent in 1991–95. As China is rapidly rising as a new economic power, its deepening participation in the regional and global economy, through both inward and outward FDI as well as trade, will inevitably bring about significant implications in the international political economy. This article attempts to explore the development of Chinese outward FDI, its characteristics and motives, the outward FDI regime, the government's policies and existing problems, and the prospects for the future trend of Chinese outward FDI.

Until recently, few people in mainland China would dispute the significance of the hukou (household registration) system in affecting their lives – indeed, in determining their fates. At the macro level, the centrality of this system has led some to argue that the industrialization strategy and the hukou system were the crucial organic parts of the Maoist model: the strategy could not have been implemented without the system. A number of China scholars in the West, notably Christiansen, Chan, Cheng and Seiden, Solinger, and Mallee, have begun in recent years to study this important subject in relation to population mobility and its social and economic ramifications. Unlike population registration systems in many other countries, the Chinese system was designed not merely to provide population statistics and identify personal status, but also directly to regulate population distribution and serve many other important objectives desired by the state. In fact, the hukou system is one of the major tools of social control employed by the state. Its functions go far beyond simply controlling population mobility.

No monocausal explanation will suffice to account for the complex process of economic development. At different times and under different politico-economic circumstances, different combinations of actors and institutions are involved as agents of development, which include factories, investment banks, entrepreneurial bourgeoisie, foreign capital and the state. When “telescoping” the arduous process of development is the key imperative, the role of the state becomes particularly crucial in designing overall development strategies, governing the market by getting the prices wrong, and controlling the major sources of financing development. It should be noted, however, that the state is a multi-layered structure of authority with its own intra- and inter-governmental dynamics. As the extensive literature on the East Asian Newly Industrializing Economies (NIEs) almost uniformly adopts the highly encompassing term of state, it largely fails to differentiate the roles performed by the central and local governments in executing “developmental intervention.”

The literature on interregional disparities in China has become quite extensive, as has that on absolute poverty and its regional incidence. But most of this work deals with huge “regions” – entire provinces or even groups of provinces (“coastal” versus “western” China) – each of which is comparable, in area and population, to a good-sized country. Needless to say, there may well be large variations within such regions at any point in time, and large spatial shifts within them over time. Many studies suggest, for example, that, contrary to the “Maoist model,” relative disparities among provinces did not narrow significantly during the Maoist era. Can the same be said of disparities among counties, within individual provinces? And are the broad spatial patterns of poverty, as observed across provinces, somehow replicated in microcosm within particular provinces?

Regional and provincial cultures have (re)emerged in China since the 1980s, regardless of their previous existence or articulation. Although it is not yet clear whether this represents the seemingly powerful trend of fragmentation or nothing but a superficial phenomenon generated by the unprecedented pace of economic integration throughout the country, there is every reason to believe that regional and provincial cultures, or identities, in China have been (re)shaped by the new process of modernization, decentralization and international interactions that have characterized the reform era. Competition for resources, markets and preferential policies have forced every locality to mobilize support from their local populations; reform, decentralization, marketization, internationalization, growing provincial autonomy and the decline of state ideology have combined to challenge some time-honoured traditions and provide an opportunity for the discourse of regional cultures and identities. While it is almost a common belief in China that a construction of a glorious past will inevitably lead to the self-confidence needed for a nation or community to build a better future, some see the current reforms as an opportunity to rid themselves of, or distance themselves from, the anti-commerce, anti-individual conservatism assumed to be inherent in the Chinese state ideology; others, those in the south-east coastal area in particular, find themselves natural heirs to the open and dynamic entrepreneurial culture suppressed by the centralized state in the past.

On the 50th anniversary of the founding of the PRC, the legal system plays an increasingly significant role in social, economic and even political relationships. Legal norms drawn largely from foreign experiences have been selected and applied through a plethora of newly established institutions. The role of law as a basis for government authority has become a legitimate and significant issue in the broader political discourse. Despite these achievements, law in China remains dependent on the regime's policy goals. Particularly where political prerogatives are at stake, legal requirements appear to pose little restraint on state power. In this sense, the ten years that have passed since Tiananmen appear to have had little impact on the willingness of the party-state to dispense with legal requirements in pursuit of political expediency. If we are to rely upon Dicey's dictum on the rule of law being in effect when the state becomes just another actor, the rule of law in China still seems a distant prospect indeed.