The Effect of Population Aging on Foreign Direct Investment

Abstract

Since the implementation of economic reforms and the opening up of China, it has relied on low labor costs and preferential policies to successfully enhance its technological capabilities and economy. However, in recent years, the aging of our population has intensified, the demographic dividend period is ending, and foreign direct investment has declined significantly. The communique of the third plenary session of the 20th Central Committee of the communist party of China pointed out the need to improve the system of support and services for population development. Combined with current studies, though many studies believed population aging has a negative influence on foreign direct investment the various mechanisms and factors affecting them are still very diverse, and have not been able to form a unified theoretical framework. This paper will sort out the existing studies and make suggestions on the theoretical framework for future research and governmental decision-making.