China in East Asia: The process and implications of regionalization

This paper assesses the impact of foreign direct investment on China's integration into the East Asian regional economy. The phenomenal growth of investment since 1992 has both benefited from, and also fuelled, the growth of local autonomy in post‐Mao China. The central state's ability to control the process of integration has subsequently been significantly undermined as the relationship between the local and the international becomes ever more important. While the tendency to emphasize low cost production advantages has attracted considerable inward investment in some areas, impressive short‐term growth rates may hide less beneficial long‐term consequences for China's position within East Asia, and for the trajectory of China's development in general.