Foreign Direct Investment Inflows into China

Foreign direct investment (FDI) has shown itself to be a strong catalyst in economic development. This paper attempts to research what factors affect the Foreign Direct Investment (FDI) inflows to China from 2002 to 2018, making China a great success in economic development. This paper presents a multiple linear regression model methodology using monthly data spans from 2002 to 2018 to evaluate and analyze. This process will include gathering data from various secondary sources and a set of quantitative research methods. The multiple linear regression model hypothesizes there is a relationship between Foreign Direct Investment and explanatory factors: Consumer Price Index Growth, Producer Price Index Growth, Economic Climate coincident Indicator, Official Exchange Rate to USD, Net Exports, and Economic Policy Uncertainty. The result indicates that the CPI growth rate, Net Exports and Economic Policy Uncertainty have significant positive relationships with China’s FDI inflows. Whereas the PPI growth rate and ECI negatively correlate with the response variable.