The Impact Of Agriculture's Utilization Of Foreign Direct Investment On Chinese Agriculture

Since the reform and opening up, FDI (Foreign Direct Investment) inflow to agriculture in Chinahas made great achievements, has become an unignored strength of agricultural economy developmentFDI inflow to agriculture in China experiences three periods, which are rules and regulations making,emancipating the mind and scientific development. FDI inflow to agriculture in China has played animportant role in making up for the investment insufficiency, promoting agricultural science andtechnology progress, promoting the industrialization of agriculture, increasing employment, improvingagricultural trade, promoting agricultural reform in the rural development. Benefiting from the positivepolicy of introduction of foreign capital in China, FDI inflow to agriculture in China amounted to1.43billion US dollars in2009and was among the best in the world, which is consistent to the position ofChina as the biggest developing country and a large agricultural country. FDI inflows would help topromote Chinese modern agricultural development, and would have important strategic significance.China should increase its efforts to attract FDI inflow to agriculture, improve the level of FDI utilization,and give full play the positive role of FDI in agricultural investment increase, agricultural science andtechnology level improvement, agricultural trade and other aspects.Based on the international and domestic development of FDI, this paper combs the situation andproblems of FDI inflow to agriculture in China, and develops empirical research on the impact of FDIon the development of Chinese agricultural economy, the development of crops, forestry, animalhusbandry and fishery industries, the development of agricultural economy in different region,agricultural trade, and farmers' income by establishing the linear regression model. This study alsoestimates the elastic coefficient of FDI inflow and the above indexes. This study does the research onthe control degree of FDI on Chinese agriculture and the empirical research on the influence factors ofagricultural FDI inflows. Finally, this study puts forward the policy suggestions for using theagricultural FDI on the scientific basis.The results shows that the FDI inflow to agriculture has a positive impact on the nationalagricultural economy, crops, forestry, animal husbandry and fishery industries, agricultural economy indifferent regions, agricultural trade, and farmers' income. Some related regression models pass thestationary test, co-integration test and Granger causality test and the most reliable Model Parameters areselected by this study. This study finds that the control degree of FDI on Chinese agriculture isrelatively low by making analysis on indexes which include the proportion of FDI inflow to agricultureto the whole industry, comparison with other industry, control level of the foreign part on foreigninvestment enterprises, fixed assets occupancy of foreign investment enterprises in the agriculture sector,registered capital occupancy of foreign investment enterprises in the agriculture sector, and thedistribution of FDI in terms of source. Regression models about the factors which impact the FDIinflow are established to estimate the elastic indexes of these influencing factors. The result shows thatthe agricultural GDP, agricultural labor number and agricultural trade are the positive impact factors and the domestic investment has a Crowding-out Effect.Finally, this study summarizes the whole study and makes conclusions and put forward somepertinent policy suggestions on FDI inflow to agriculture.