Multivariate analysis of foreign direct investment in China

The purpose of this paper is to empirically examine the foreign direct investment (FDI) in China. China has become an increasingly important hosting economy for FDI and this trend is expected to continue with the country's entry to the World Trade organization. In this paper, we will review the current literature related to FDI, and use secondary data to employ regression to estimate the trend line of FDI in China. This is followed by factor analysis to examine the variables and factors influencing the FDI in China. We will then perform clustering analysis to look at the regional distribution of FDI in China and finally draw conclusions.