This book about China's integration into the world economy proposes a radically different perspective. Most economists view China's large foreign direct investment (FDI) inflows as the result of China's economic success. This study views the same phenomenon as a function of the imperfections in the Chinese economic system. It uses economic theory to explain FDI to a greater extent than previous studies on the same topic. It also presents comparative FDI data of additional countries, making it more comprehensive than previous studies which focused only on China.