This thesis aims to analyze the relationship between foreign direct investment (FDI) and economic development, and determine and follow the development path of China by utilizing the Investment Development Path (IDP) theory by John H. Dunning. The results of this work show that China ranks at the third out of five stages of the IDP. The analysis of IDP on Chinese FDI, revealed a very close correlation between FDI and economic development. Throughout the analysis of the different stages of the IDP, China’s development has shown very similar patterns of advancements as suggested in the theoretical framework of the IDP. China’s relatively open FDI policies and the government’s control over investments directed at developmental purposes, have contributed to the rapid economic development and strong position in today’s global economy.

This thesis aims to analyze the relationship between foreign direct investment (FDI) and economic development, and determine and follow the development path of China by utilizing the Investment Development Path (IDP) theory by John H. Dunning. The results of this work show that China ranks at the third out of five stages of the IDP. The analysis of IDP on Chinese FDI, revealed a very close correlation between FDI and economic development. Throughout the analysis of the different stages of the IDP, China’s development has shown very similar patterns of advancements as suggested in the theoretical framework of the IDP. China’s relatively open FDI policies and the government’s control over investments directed at developmental purposes, have contributed to the rapid economic development and strong position in today’s global economy.

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