The FDI Flow From EU To China: Development,Dynamic Factors And Strategic Significance

Compared with International trade of goods and service, FDI (Foreign Direct Investment) connect China and the World economy in a much deeper degree, and has been one of the most important driver for China's economic development. In this paper, the author tried to analyze the development of the FDI flow from EU to China that began from 1992. After the summary of the characters of EU's FDI to China, the paper analyzed the main economic determinants that affecting the FDI flow from the aspect of EU, China and the global macro economy respectively. Though there are some disadvantages for China to attract EU's FDI, there are more advantages in its development. Then, after the analysis of all kinds of effects that EU's FDI have for China, in the author's opinion, there are many far-reaching strategic significance for both the macro and micro level of China's economy, especially when China is in a period that transferring from amount oriented FDI to a better-structure oriented FDI, although the amount of EU's FDI to China is still small so that the effects are not so obviously now. With such an opinion, this paper then tried to put forward some possibly steps that China should take to get more FDI from EU and absorb the benign effects better so that to accelerate the long-term development of China.