The Impact of US FDI in China on the Chinese Upgrading in Global Value Chains

The research investigates the role of US Foreign Direct Investment (FDI) in facilitating China’s transition within Global Value Chains (GVCs) from 2008 to 2021, a period marked by significant geopolitical tensions and economic shifts. Focusing on high-value sectors like information and communication technology (ICT), financial services, and manufacturing, the research analyzes how US investments have enabled China to move from low to high-value-added activities, enhancing its global market integration and economic reform. Utilizing data from sources such as the Rhodium Group, the Bureau of Economic Analysis, and the Input–Output Database (IOD), the authors employ a quantitative model to examine the relationship between US FDI inflows and China’s GVC participation rate. The results highlight that US FDI, alongside GDP growth and technological readiness, significantly contributes to GVC participation, with technology transfer playing a pivotal role in this process. The research stresses the vital role of focused international investments in fostering economic advancement and providing guidance for governmental and business executives on planning enduring expansion and success globally. The research expands on existing knowledge by elucidating the subtle impact of global investments on economic expansion amidst intricate international scenarios, laying the groundwork for well-informed policy and corporate choices in a globally interconnected economy. © 2025 Elsevier B.V., All rights reserved.