The Role of Foreign Investment in China’s Land-Use Policy

Foreign direct investment (FDI) became the key element of China’s strategy for improving China’s productive forces and improving living standards for its people. FDI provided an influx of badly needed cash and management and marketing expertise that would allow China to develop its market system. Among the consequences of China’s FDI policies, land use developed into a pivotal issue and one that tested the ability of government to balance centralizing and decentralizing tendencies. Along the way, macromanagement and micromanagement became disjointed and produced distortions for local governments to handle. This article looks at land-use policy to illustrate how China’s FDI strategy led to uprisings in the streets, arguments in the courts, and a continuing diminishment of arable lands, among other resources under stress.