▁meaning ▁that ▁to ▁explo it ▁the ▁advantages ▁of ▁the ▁prefer ential ▁foreign ▁direct ▁invest ment ▁treat ments , ▁Chinese ▁companies ▁re located ▁their ▁capital ▁to ▁outside ▁of ▁China ▁and ▁re inv ested ▁back ▁to ▁China . ▁This ▁form ▁of ▁foreign ▁direct ▁invest ment ▁account ed ▁for ▁around ▁one ▁fourth ▁of ▁the ▁invest ment ▁flows ▁in ▁ 1 9 9 2 . ▁Econom ist ▁Barry ▁N aught on ▁ident ifies ▁two ▁other ▁reasons ▁for ▁the ▁sur ge ▁after ▁ 1 9 9 2 : ▁ 1 ) ▁the ▁institution al ▁found ations ▁and ▁prefer ential ▁foreign ▁direct ▁invest ment ▁policies ▁that ▁the ▁party ▁had ▁been ▁building ▁and ▁providing ▁in ▁the ▁previous ▁de cade ; ▁and ▁ 2 ) ▁a ▁further ▁opening ▁of ▁the ▁se ctors ▁that ▁foreign ▁companies ▁could ▁particip ate , ▁from ▁mainly ▁export ▁manufact uring ▁before ▁ 1 9 9 2 , ▁to ▁domestic ▁market place ▁like ▁real ▁estate ▁afterwards . ▁ ▁Special ▁economic ▁zones ▁▁ ▁In ▁terms ▁of ▁location , ▁Chinese ▁leaders ▁set ▁up ▁special ▁economic ▁zones ▁to ▁attract ▁foreign ▁invest ment ▁since ▁ 1 9 8 0 , ▁with ▁the ▁first ▁four ▁in ▁Sh enz hen , ▁Z hu hai , ▁and ▁Sh ant ou ▁in ▁Gu ang d ong ▁province ▁and ▁X iam en ▁in ▁F uj ian ▁province . ▁The ▁second ▁wave ▁came ▁in ▁ 1 9 8 4 ▁when ▁Chinese ▁government ▁set ▁up ▁ 1 4 ▁more ▁special ▁economic ▁zones ▁in ▁coast al ▁area . ▁Four ▁years ▁later , ▁Chinese ▁government ▁designated ▁H ain an ▁island ▁as