This paper aims to provide a deep insight about the general theories of Foreign Direct Investment (FDI) developed till now and seeks to analyse reasons multinational enterprises (MNE’s) are spreading their operational activities across the whole world, more precisely in China. An attempt will be made to determine the extent to which the different theories of FDI in international economics explain the pattern of FDI in China through worldwide examples and famous scholars’ research findings. The positive as well as negative impacts of FDI more specifically on China, who has grown from a developing country to a powerful economic giant during the last decades, are discussed in this paper.
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