Understanding the Role and Impact of FDI on Economic Development

China is emerging as a key global market of the 21st century, as its economy continues to expand rapidly, and as it progresses with accession to the World Trade Organisation. Many European companies are now approach China as a long ���¢��������term growth opportunity, and are increasingly using Foreign Direct Investment as their mode of entry into the country. Since 1979 the progressive economic reform has radically transformed the Chinese economy. China has gradually opened its economy and has attracted a large amount of foreign direct investment (FDI). The literature on the effects of FDI in developing countries provides a range of prospective benefits to the recipient country. However, many benefits of FDI are frequently challenged. This dissertation proposed a hypothesis, which was to be verified, that closely developed FDI are a key element, which influences the success of trade in the Chinese market and further enhances successful customer relationship building. Finally a simple approach to examine all the related variables and FDI would be implemented. This study also reveals the importance of China���¢��������s policies in attracting FDI in the analysis.