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Australia's direct investment in China: trends and determinants.

China has been the largest foreign direct investment recipient among developing countries, and Australia's direct investment in China is also growing steadily. This article investigates the trends and determinants of Australia's direct investment in China. Evidence presented in this paper indicates that Australia's direct investment in China is above the equilibrium level and that its regional distribution is correlated with economic and policy factors.

Keywords: FDI, gravity model, sectoral distribution, provincial FDI

JEL Codes: F21, F23

1 Introduction

Australian investment flows into China grew by more than ten-fold between 1992 and 2005. Notwithstanding this growth, the ...

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