Research On Foreign Direct Investment In Northeastern Industrial Base

Since the last century, particularly after 1980s, foreign directed investment (FDI) increased at unprecedented faster rate than that of international trade. In close context of this background, since late 1970s, China achieved the impressive progress in attracting FDI by upgrading its openness to the rest of world and adjusting its FDI regime. For years, China boasted of the most FDI inflow among developing countries. As FDI continue to flow into China, a large number of jobs are created and exports rocketed. Also, a huge of amount of technologies and managerial skill were introduced into China. All of these aforementioned contributed a lot to Chinese economic prosperity. However, at the same time, unavoidably some serious problems occurred. One of urgent problems is the increasing imbalance in economic development among different regions, particularly between the coastal China and northeastern China. Even though there are a number of factors identified as reasons of this phenomenon, it is widely believed that to a great extent, the volume, structure, type, technology level and regime in FDI resulted in this imbalance. Now, there is a growing interest among scholars and researchers to study how to revitalize the economy in Northeastern China by effectively and efficiently utilizing FDI.Based on the reviews of the literature in FDI theory and development economics and summarization of characteristics and impacts on Northeast economy of FDI, this paper aims to identify the factors constraining the FDI development in Northeastern industrial base of China and prescribe the policy implications.Theoretical basis of this paper is Marxist economics. The elements of modern economics can also be found in this paper. The research methods used include comparative analysis, normative and empirical analysis, qualitative and quantitative analysis, and model analysis.This paper is organized as following.In preface, several points are discussed including the background, motivation, research method, paper structure, contributions to literature suggestions for the future research. This dissertation consists of three parts.The first part is the first chapter. In this chapter, the theory on foreign direct investment. First, the classical theory on the motivation of Multinational Corporation moving abroad is briefly discussed. Then recent research on foreign direct investment in developing countries is reviewed. Finally, impacts of FDI inflow on China are fully discussed.The second part include two chapters, i.e. chapter two and chapter three.In Chapter two, revitalizing of Northeastern Industrial Base through utilization of FDI. Based on the Chapter one, the significance on revitalizing the Northeastern Industrial Base by utilizing FDI is discussed. Then, the theoretical model is introduced. At the end of this chapter, local advantages in Northeastern Industrial Base and the welfare impacts arising from FDI inflow are evaluated.In Chapter three, current problems in utilizing FDI and the reasons. This chapter is the further extension the previous chapters. First, based on the recent development in literature, current problems are put forward. Then the reasons are analyzed. At the end of this chapter, constraining factors are further discussed.The last part is chapter four.Chapter four, policy prescriptions for utilizing FDI to revitalize the Northeastern Industrial Base. In response to the problems put forward in previous chapter, a number of policy changes are suggested including improving the business environment, ownership change of state-owned enterprises, industry structure upgrading, talent training and international collaboration.Till now, there is not rich literature on the study of FDI in Northeastern China. The major contributions are as following: first, by comparing the situations in Northeastern industrial base and rest of China, the inside and outside conditions of utilizing FDI are analyzed. Second, welfare impacts on Northeaster Industrial base are closed looked at. Third, strictly based the literature, a theoretical model on FDI is put forward.