A Study Of Foreign Capital's Contribution To Hubei Economic Development

Since the reform and opening policy issued. Hubei province has actively followed the national strategy of all-sidedness, multilayer and broad fields by largely expanding the introduction of foreign capitals and guiding the directions of their investment. As a result of it. the pace of foreign capitals' utilization has been evidently quickened and Hubei provincial economy has been developing along a track of sustained speedy and steady manners. Especially after China's entering WTO, the foreign direct investment, with the ever enlarging scale and the continuous amelioration of its distribution structure, has been playing an increasing important role in Hubei economic development.The thesis firstly introduces the general theory of foreign investment and economic development, give an brief introduction to the contemporary development of foreign capitals in Hubei and its relation to the provincial economic development. Then it comes to a model built as Total Factor Contribution (TFC), which refers to foreign capitals' involvement. Following above, this thesis explores and tests the foreign capitals' contribution to Hubei provincial economic development qualitatively and quantitatively by using the statistic data. Finally, major arguments are raised to the foreign capitals' contribution to Hubei provincial economic development.The thesis describes the features of Hubei Provincial economic development as well as its advantages and disadvantages. For investigating the function of foreign capitals in Hubei provincial economic development, the author analyses current situation in aspects of foreign capitals'scale, structure, investment allocation by industry, sector and region. It is believed that the contribution of foreign capitals to Hubei provincial economic development fall into six dimensions: GDP growth, enhancing export competitive, industrial structure upgrading, technological advancement, capital formation and higher employment. Foreign capitals are noticeably improving the export product' structure of high & new technology as well as the whole export structure province-wide, promoting the technological innovation among competing industries, encouraging the growth of high & new tech-oriented enterprises and technological reformation of traditional enterprises, enhancing the position of Hubei as a big manufacturer among other provinces, increasing opportunities for employment growth within the province. However, this thesis also identifies that some gaps exist between Hubei and other relative developed south-east coasting regions even compared with the average performance across the country in terms of export shares and capital formation scales. In view of the sound economic infrastructure and implementing Westward Exploration strategy, a more important role of foreign capitals can be expected in the future development of Hubei provincial economy.