Foreign Investment, Economic Growth, And Temporary Migration: The Case of Shenzhen Special Economic Zone, China

Abstract

This paper examines the flow of foreign investment and the rise of temporary migration in Shenzhen Special Economic Zone, China, during 1979-1994. I show that the unprecedented growth of Shenzhen's economy is closely linked to both foreign investment and growth of temporary migrants. I also explore factors that led to the large increase of foreign capital investment and highlight Shenzhen's geographic proximity to Hong Kong and the availability of abundant migrant labor. Finally, based on the experience of temporary worker programs in Western Europe and the United States and the experience of Shenzhen, I examine several conditions which either facilitate or hinder the likelihood of intergration of temporary migrants.