Southeast Asian ethnic Chinese investing in China

Abstract

China's growth due to high levels of domestic investment and savings was pushed further by Deng Xiaoping's economic reform and open-door policy in 1978. Through these changes, China became involved in international capitalism, which then led to the opening up of its Special Economic Zones and regions of Southeast Asia. Much of China's FDI originated from the ASEAN countries, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand, where ethnic Chinese contributions have played an important role. Their investments have resulted in significant benefits for China's economy but are expected to decrease as the Chinese are becoming less dependent on them. This paper constitutes key historical and political forces that have shaped overall relations between China and Southeast Asia and displays different responses to the open-door policy as well as the problems faced by ethnic Chinese in their development of economic links with China.