For the trend in the 1990s, economist Nicholas R. Lardy summarizes four reasons for the continuous growth in foreign direct investment: 1) globally, the increase in the magnitude of foreign direct investment flowing to developing countries; 2) the political stability after the Tiananmen Square Incident and China’s domestic economic growth; 3) China’s more liberalized policy in attracting foreign investment; and 4) what he calls the “the phenomena of recycled capital of Chinese origin,” meaning that to exploit the advantages of the preferential foreign direct investment treatments, Chinese companies relocated their capital to outside of China and reinvested back to China.