Governmental policy preferences and foreign capital allocation: The case of China

This paper compares the determination of foreign direct investment and World Bank loans in China, with a focus on the role of its government. The statistical analysis reveals that World Bank loans responded sensitively to the major regional policy changes since the mid-1990s, but foreign direct investment did not. These findings pose an analytic challenge to the “strong” version of the state-centered approaches to the politics of economic development represented by the developmental state literature. However, they lend support for a “weak” version of the state-centered approaches developed by American political scientists Stephen Krasner and Theda Skocpol. He has taught comparative and international politics in Nankai University, China, Kent State University, and Walsh University. He is currently working on his dissertation about the political economy of foreign aid in China. The author wishes to thank Dr. Dennis Hart and Dr. Steven Hook and the three anonymous reviewers for their helpful comments on early versions of this paper. The author also wishes to thank Brian Juliao for his linguistic help.