An Analysis on the Outward Movement of Foreign Direct Investments in China’s

　　Abstract: Foreign Direct Investments (FDI)in the labor-intensive manufacturing sector have been moving out of China’s coastal regions recently. This has been brought about by rapid changes to the geographical comparative advantages of other economies, seismic changes to the international economic environment-in particular the global economic crisis hitting on economic entities-as well as intensifying competition over FDI across the globe, among other reasons. Stopping the avalanche of FDImoving overseas, and channeling their movement to the interior heartlands are immediate policy priorities for China at the moment. Not only will this policy help the more developed coastal regions upgrade their economic structure, it will also help China’s less-developed provinces, accelerateChina’s overall industrialization process, and create job opportunities in China’s inland. This policy will need to take into account the realities of China’s current economic structure. Key areas to note include creating economics of scale via careful choices of interior centers, developing chains of productions, and lowering the costs for foreign investors moving inland. Unrealistic industrialization policies should be avoided at all costs.