Which of the following is an example of foreign direct investment in China?
A)Canadian entrepreneur Kevin O'Leary buys stock in the Chinese auto company, Cherry Automobile Company.
B)Chinese Shenzen Airlines company buys a small Canadian airline company, Porter.
C)The Canadian company George Weston Ltd buys a warehouse in Shanghai.
D)The Bank of China purchases Canadian government bonds.
E)A Canadian foreign exchange speculator buys $200,000 worth of the Chinese currency, the yuan.

Question

Quizplus · Accepted Answer

Foreign direct investment refers to a company or individual investing in a foreign company or establishment. Option A is incorrect as buying stocks does not necessarily mean direct investment. Option B is incorrect as it involves a Chinese company buying a Canadian company instead of the other way around. Option D is incorrect as it involves the purchase of government-issued bonds rather than direct investment. Option E is incorrect as it involves a foreign exchange transaction rather than direct investment. Option C is the correct answer as it involves a Canadian company purchasing a physical property in China, which counts as direct investment.

Which of the Following Is an Example of Foreign Direct