Research On Quality Problem Of Central Area FDI Utilization

Basing on gains from Foreign Direct Investment (FDI), this paper establishes an assessment framework with two aspects of introducing and utilizing to assess the quality of FDI itself and the achievements of utilizing FDI respectively, so as to make a preliminary determination about actual conditions of utilizing FDI in central China by several norms, and put forward measurements of improving the utilization of FDI according to the actual conditions.The methods applied in this paper are normal study methods and actual study methods, induction and deduction, theoretical abstraction and practical investigation, etc. Induction is used for establishing assessment framework, and statistic analysis, panel data model, the method of co-integration of panel data, for inspecting quality of FDI in central China.The actual study of statistics and econometrics results in a preliminary determination of the quality of utilizing FDI in central China. The principle content and major ideas are listed as follows:(1) It is to summarize and establish norms for assessing FDI in China from the aspects of introducing and utilizing achievements. Norms of introducing are for distinguishing nature of FDI and norms of utilizing for determining utilizing achievements of FDI.(2) Analysis of quality of FDI in central China demonstrates that the quality of FDI is being continuously improved in the past. Although FDI has positive effect to a certain extent on adjusting the industries structure in this area, it will hinder the further optimization of the industries structure. We find that the quality of FDI in central China is relatively low judged by sources, utilizing modes, regional distributions of FDI, knowledge and technology from FDI and actual FDI being in place.(3) The analysis of the quality of utilizing FDI by applying statistics reveals FDI in central China has brought positive effects, such as capital contribution, economic growth, upgrading of industries structure, contribution of exports, expansion of employment and economy pluralizing, but the quality of utilizing FDI is not high in accordance with norms of quality of economy increasing, localizing of FDI enterprises, spillover effects, levels of R&D, net welfare effects of tax favorable treatments.(4) The econometric analysis of the quality of utilizing FDI reveals that central China does well in utilizing FDI in consideration of the contribution of FDI to net capital, to economic growth, to the development of modern industry, to the upgrading of industrial structure and to the growth of export, while poorly on spillover effects and levels of R&D.(5) Presently, central China is getting into a new stage of utilizing FDI, we should adjust strategy and policy for FDI, via enhancing supervision, promoting localization of FDI enterprises, building environments with fair competition, improving deposit of human capital and innovation capacity of enterprises to improve the quality of utilizing FDI. Meanwhile, we should optimize institutions, increase investments to science & technology and education, encourage and support the development of private enterprises.