Which of the following is an example of foreign direct investment in China?
A)U.S.auto entrepreneur Elon Musk buys stock in Alibaba Group Holding Limited of Hangzhou,China.
B)Chinese Shenzen Airlines company buys a small U.S.midwest airline company,Air Chicago.
C)The U.S.company Walmart buys a warehouse in Shanghai.
D)The bank of China purchases U.S.Treasury bonds.
E)A U.S.foreign exchange speculator buys $200,000 worth of the Chinese currency the yuan.

Question

Quizplus · Accepted Answer

Foreign direct investment refers to a company investing in and owning a business in a foreign country. Option C, where Walmart buys a warehouse in Shanghai, is an example of foreign direct investment in China as Walmart is investing in and owning a business (warehouse) in China. Options A, B, D, and E are not examples of foreign direct investment as they involve either buying stocks, bonds or exchanging currencies, but not actually owning a business in China.

Which of the Following Is an Example of Foreign Direct