The purposes of this paper are to examine the relationship between Japanese foreign direct investment (FDI) and Japanese exports to China since the Open Door Policy, and to make some observations about Chinese expectations for and assessment of Japanese technology transferal. Multiple regression analysis is carried out and it is found that in most sectors, FDI was not an influencing factor on exports. In the 1980s it appears that Japanese investors were most interested in producing goods for export, but in the 1990s, they have become more interested in selling their products to the Chinese market. The Chinese Government had hoped that all foreign investors would bring their latest technologies, but many Chinese people believe that Japanese investors have not been doing so, and an independent survey carried out in 1985 supports this belief. Japanese investors are not unique in delaying the transfer of their technologies. However, in recent years export growth has declined, while FDI growth has risen. This would seem to infer that China will gain from more and a wider variety of technology.
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