The Research On Foreign Direct Investment And The Economic Growth Difference In The Eastern And Western Regions Of China

In the course of thirty years'reform and opening to the outside world, our country has achieved great success in utilizing foreign direct investment (shortened form FDI). In 1979, the amount of FDI in China was only 31830000 dollars. In 2007, the amount of FDI in China reached 747 hundred million dollars. From 1993, China has ranked first in using FDI for fifteen years among the developing countries. In 2002, FDI in China achieved 527.43 hundred million dollars. It is the first time that China ranked first in the world,exceeding U.S.A. FDI promotes the constant and rapid economic growth of China by capital formation, import and export trade, employment etc. In spite of the economic growth, we can't ignore its defects. One realistic and pressing problem is that the regional distribution of FDI in China is highly concentrated in the eastern region. In 1985, the eastern region's FDI acounted for 87.31 percent in the country, and the western region's proportion was about 7.66 percent. Till 2006, the proportion was 90.32 percent and 3.45 percent in the eastern and western regions separately."East-high and west-low"in the regional distribution of FDI in China widens the economic gap between the eastern and the western regions in fact, which goes against the realization of the long-term goal, that is the harmonious development of regional economy and the building of harmonious society. Based on this, the paper discusses the relation between FDI and the economic growth difference in the eastern and western regions, and the factors that affect the regional distribution of FDI by the systemic compare and empirical analysis, which will supply the scientific basises for better use of FDI to realize the harmonious development of regional economy.The thesis includes the introduction and the mailbody. The introduction introduces the research background and meanings, basic thought way and frame arrangement, research actuality. It also points out the shortages as the direction for the following research.Chapter One introduces the theory on FDI and economic growth, which is the logic beginning of the research .It mainly introduces Two-Gap theory, New-Classical growth theory, Eendogenous growth theory on FDI and economic growth theory .Besides, concerning the theory basis of FDI's regional distribution, it mainly introduces the location theory and international direct investment compromise theory .Chapter Two introduces the status of the regional distribution and economic growth unbalance in the eastern and western regions. Firstly, it introduces the development status of FDI in China since the reform and opening. Secondly, it analyzes the status of FDI's"east-high west-low"in regional distribution in China from the view of regions and provinces, and the reality of the widening economic growth gap between the eastern and western regions. The analysis shows the two sides have the same change track since the reform and opening.Chapter Three demonstrates the relation between FDI and the economic growth difference in the eastern and western regions emphasizely. With the method of time serial, it measures the relation between FDI and the economic growth difference in the eastern and western regions from 1985 to 2006, which proves the existence of long-term cointegration relation between FDI and economic growth in the eastern and western regions, and the higher contribution elasticity in the eastern region is than that in the western regions. It shows that FDI is one of the factors that results in the economic growth disparity in the eastern and western regions. Cause and effect test between FDI and economic growth in the eastern and western regions shows that FDI and economic growth hanve formed mutual cause and effect relation in the eastern region, but not in the western region.Chapter Four discusses the influences of FDI on the economic growth in the eastern and western region. Firstly, it analyzes the effect mechanism that FDI influences economic growth in the eastern and western regions from the view of economic globalization. Secondly, it discusses the FDI's effects on economic growth in the eastern and western regions from capital formation, export and import trade, employment and technology innovation respects.Chapter Five investigates the factors that affect the regional distribution of FDI in the eastern and western regions. It includes two respects. One is called social economic environment, including market factor, labour force, centralization, infrastruture. The other is the influence of policy variable on FDI's regional distribution, which is from the view of FDI's regional policy, and evaluates the emplement effect of the policy.Chapter Six puts forward the countermeasures on how to make full use of FDI and achieve the harmonious development between the eastern and western regions. In the future, the basic thought way for the eastern region to utilize FDI is to realize the change from absorbing FDI to choosing FDI, and from pursuing quantity to pursue quality. Absorbing FDI for the western region can be discribed shoulder heavy responsibility. Goverments shuld act important role in absorbing FDI, supplying more public goods for FDI. The western region should pay more attention to exert the function of growth-pole, absorb industry according with its own comparative advantage, quicken the opening of service industry, strengthen the cooperation with the eastern region and so on.