Study Of The FDI Spillovers Effects On China's Automobile Industry Based On CGE Model

The communities have worried that it is difficult for China's incompetent automobile enterprises to withstand the impact from foreign automobile industry prior to joining the WTO. However, China's automobile industry has not been destroyed, but rather to achieve a great development after the transition period. On the one hand, the car industry based on joint-venture blocked impact to domestic automobile industry from imported cars after China's auto market tariffs dropped; on the other hand, China's automobile industry's contribution ratio to GDP has been increasing. This phenomenon is worth exploring. In fact, it is China's increasing open market and competitiveness after the entry to the WTO that makes Cross Motor Co. change the technology transferring strategy which was Output low-end technology to Output advanced technology. This change creates a precondition for technological spillover effects.Against the above background, based on the development of automobile industry after joining the WTO as background, this paper uses an expanded-CGE model, which is constituted of sub-module of FDI spillover effects, the split database of industry, historical baseline and forecast baseline of the automobile industry. Further, based on this expanded CGE model, this paper wants to research the impact of effects from FDI spillover on the development of the automobile industry with a new view of a dynamic general equilibrium by contrasting the simulation of various scenarios before and after adding the sub-module of FDI spillover.The paper contains five chapters. The first chapter is introduction. The second chapter outlines the development course and status quo of automobile industry to introduce the impact of spillover effects in the automobile industry. The third chapter gives a comprehensive analysis of the impact of FDI spillover effects on the auto industry, for example, effects of market competition, the model - imitative, the effect of industry links, training effect, industry gathering and est. Then this chapter expatiates on FDI spillover effects, and finally puts forward the real constraints of auto industry FDI spillover. The fourth chapter constructs of an expanded CGE model embed sub-module of FDI spillover. The fifth chapter simulates various scenarios before and after adding the FDI spillover to Chapter IV as the model framework. At the end, the chapter pointes out the important role of the FDI spillover effects on China's automotive and related industries, and makes the related insight promotion.