The Empirical Study Of FDI's Impact On Environment In China

At the beginning of the opening policy, our government took measures of introducing the foreign capital actively to make up the shortage of capital at that time. The favorable policy not only absorbed a large amount of FDI to deal with the shortage of capital, but also had a huge effect of the development of economy. Owing to the overspill effect, FDI had contributed more to the development of our economy. Stronger as our economy power became, the problems of industrial structure, energy and environment were emerging. The classical theory said that environment contamination and GDP per capita had U-shaped relationship. There was no doubt that FDI has made great contribution to our economy. However, there were different standards of environment measurement between developed countries and developing countries, and generally the former had much stricter environmental standards. Therefore, the foreign investment of developed countries had the tendency of transferring the polluting industries.Firstly, the paper analyzed the present situation of FDI in our country; then had the qualitative analysis of the adverse effect of FDI to the environment in our country from the empirical point; in the end, the author used Environmental Kuznets Curve to calculate the net negative effect of FDI to environment. The empirical results showed that: FDI shifted China's Environmental Kuznets Curve to the right, and also increased the level of economic development in China that reached the turning point in Environmental Kuznets Curve. In the other words, it was more difficult for China to get to the turning point. Finally, at the end of the article, the author also pointed out related policy suggestions of the introduction of foreign capital.