| Since the 1980's, with the fast and continuous growth of China's economy and the rapid development of economic globalization, foreign direct investment in China has made great progress and it has become an important part of China's economy, playing a more and more important role in China's economic development. With China's entry into WTO and the further economic globalization, how to utilize FDI more effectively is becoming a big issue for China to face now. This paper focuses on the relationship between FDI and China's industrial structure, and its contents except the preface are divided as follows.Chapter 1 is an introduction of theories and literature. This part gives a simple introduction of traditional FDI theories, including theory of absolute advantage, theory of internalization of market and eclectic theory of International production. It mainly discusses theories about the relationship between FDI and host country's industrial structure. On the basis of theoretical introduction, effects of FDI on host country's industrial structure are summarized.Chapter 2 reviews the changing of FDI in China and reasons for it, points out the main characteristics of FDI's sectoral distribution in China. Generally speaking, there are four steps of China's using FDI. The causes of FDI's development in China include both internal and international factors. As for international factors, the deepening of international co-production, abundant international capital, multinational company's global integration strategy, FDI policy of less constraints and industrial structure adjusting in developing countries are mentioned. Internal determinants consist of natural factor, economic factors, institutional factors and infrastructural factors. The third part of this chapter points out four main characteristics of FDI's sectoral distribution: FDI is mostly distributed in the secondary industry; the sectoral distribution is changed periodically; FDI is significantly distributed in manufacturing industry; FDI in the real estate sector and social service industry accounts for a majority of the total amount in the tertiary industry.Chapter 3 focuses on the impacts of FDI on China's industrial structure. Panel data is examined to get the results of this part. First, a highly uneven sectoral distribution of FDI in China partly increases the bias of China's industrial structure. Second, most FDI is distributed in the secondary industry magnifies the differences of development level and international competitiveness between the secondary industry and the other two industries. Third, as the industry sector is concerned, light industry accounts for a larger amount of FDI than heavy industry, which in part contributes to the excessive expansion of consumable industry; FDI especially FDI from multinational companies accelerates the development of China's technology-intensive industries; besides the two points above, FDI also partly contributes to the duplicate construction and restrains the development of infant industry. Fourth, FDI has positive effects on the development of agriculture, such as providing capital, promoting the industrialization of agriculture, improving the technological level of agriculture production and increasing the opening level of the primary industry. Fifth, in the tertiary industry, FDI provides money for building, introduces advanced technology and experienced management, helps cultivate human resources, improves the investment environment, strengthens the competition and accelerates the process of transition toward market-oriented economy.Chapter 4 mentions problems existing in utilizing FDI, forsees the trends of FDI's sectoral distribution and makes some suggestions. Problems needed to note during utilizing FDI include the bias of knowledgement, the unreasonable sectoral distribution, bad management and duplicate construction at low level. Now China's introducing FDI are influenced by a series of factors. Considering the economic globalization which is still making progress, the compa...
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