National features of attracting FDI in high-tech sectors of China in the 2010s

Today, China is one of the strongest economies in the world, the world's largest exporter, consumer of a wide range of goods and services, and also a significant player in the international political arena. The country's ambitious plans to maintain high economic growth rates, achieve greater political influence and acquire the status of an “innovative country” - all these goals that China has set for itself - in modern conditions cannot be achieved without intensification of existing production and shifting towards production of higher added value goods and services. To achieve these goals it is necessary to accumulate advanced innovations in the country and invest in creating an independent high-tech industry. In addition to capital investments in domestic industry modernization, the most important channel for the inflow of financing and technological experience is foreign direct investment. The objectives of this work are: - Identify the specific features of the investment ecosystem of China, and in particular of the national policy in high-tech industries that can have the impact on the main FDI risks and opportunities - Identify potential industrial niches for foreign high-tech companies; - Understand what specific feature an optimal investment strategy of a high-tech company in China should have. To achieve this goal, the following tasks must be completed : - Highlight the main stages of development of China as a recipient of FDI; - Define distinctive criteria for the high-tech industries; - Identify the key current strategy for the innovative development of China and priority high-tech industries; - Identify the main factors of investment attractiveness and currant investment risks of high-tech industries of the PRC; - Analyze the main regulatory documents that determine the state policy of the PRC in relation to high-tech industries and FDI; - Analyze some incentive measures for the development of high-tech industries; - Analyze the dependence of the Chinese national high-tech production on foreign companies (in particular, in the field of artificial intelligence); - Identify potential niches for a foreign investor - Do a case study of a large high-tech multinational corporation’s investment activity in China; - Compile a detailed list of high-tech specializations in China's FTZ; - Determine the factors of FDI attractiveness of FTZ. A study of the twelve key sectors of the “Made in China 2025” strategy has showed that at the moment there is still a significant gap between national and foreign companies in the advanced innovative sectors (emerging technologies). In all sectors, dependence on foreign technologies still exists. The analysis also showed that all industries from the list are promising niches for foreign companies in China, however, each of them has its own subsectors, that are to a greater or lesser extent occupied by national manufacturers. Also they have some special FDI risks due to the Chinese national industry and legal specifics. In the process, the main hypothesis of the study was confirmed: in order to successfully operate in the Chinese innovation ecosystem, a foreign company must meet the national interests of China by contributing to the development of the national industry and get government support at both the national and local level.