Abstract
Despite a slowdown amidst the global economic crisis of 2008-2009, China remains the world's fastest growing economy. Real GDP grew at 8.7% in 2009, mainly owing to the government's huge stimulus program. A stronger growth of 10.0% is expected for 2010 as a result of a recovery in the property market and a rebound of domestic spending. As exports slowed down, the country's current account surplus declined from 9.8% of total GDP in 2008 to 7.6% of total GDP in 2009.
China's exceptional economic growth as well as its impressive growth potential continues to attract a large number of investors to the country. The Chinese government generally welcomes foreign investment and implements a wide range of incentive policies to foreign businesses. However, investors continue to complain about a complicated business environment with a lack of transparency, inconsistent law enforcement as well as protective policies for local firms. In 2009, the Chinese government increased its support for the export sector, imposed restrictions on government procurement from foreign companies, used its new anti-monopoly law to block foreign investment and
came under pressure from trade partners for its "dumping" practices. Despite these challenges, China's economy remains competitive and the country is one of the main destinations for foreign capital investment. In 2008, foreign direct investment (FDI) inflows reached US$109 billion and recorded a period growth of 41.1% in real terms between 2003 and 2008.
