| The theory of Economic Integration is enriched with the development of the economic integration in the world, which involves various aspects. Kindleberger defined"investment creation"and"investment diversion"in 1966, based on the Viner's concept of"trade creation"and"trade diversion". In 1990, Yannopoulos detailed the relationship between the FDI and global integration and categorized them as Defensive import-substituting investment, Reorganizational investment, Offensive import-substitution investment and Rationalization investment, which recounts the response of the enterprises and TNCs in the face of economic integration. And the trade liberalization, resulted from the integration, has some impact on the mutual investment among the integration. The theory study is the foundation of the analysis of the investment strategy in the CAFTA.We cannot totally count on the Kindleberger's theory or the Yannopoulos's because they were concluded from the study of European Community, which is viewed as an advanced integration composed of developed countries. It is definitely not proper to apply those theories on the CAFTA, made up of merely developing countries. Only two investment strategy response is deemed to happen in the CAFTA after the analysis and comparison. Since the CAFTA will not get much more from outsides after its establishment, the destination of FDI becomes a concern. Despite the seeming advantage China owns, the comparison of investment environment doesn't foretell an optimistic tendency. Some matching proposal follows at the end of the dissertation. |
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