The Economic Effect Of FDI In Shanghai

Generally speaking, foreign capital flows to a country including foreign loans, foreign direct investments (FDI) and other foreign investments. As for China, FDI have taken dominant position and became the greatest part of foreign capital flowed to China since 1992. With China's reform and opening up to the outside world, more and more foreign capitals are attracted to here and have inevitably made great contribute to the development of China's economy. China is now benefit not only from capital needed for modernization drive, promoting export and import and providing jobs, but also from Industrial upgrade and other spillover effect brought about by high and new technologies, advanced strategies and management that brought about by foreign capital especially FDI.As one of China's areas opening to the outside world with sound market economic system, Shanghai are cultivating favorable investment circumstances and has distinctive advantages on marketing potential, labor quality, and infrastructure. Back on the most dynamic Yangtze River delta, Shanghai is aiming to construct one of China's all-around economic metropolitan. To doing so, she is quickening her strategic economic restructure and cooperating with other Yangtze River delta cities in industrial division. They are going to achieve effective feedback. It is reported that the GDP of 16 cities of Yangtze River delta has surpassed Pearl River Delta, counting on a quarter of country's financial revenue, and the output of it's foreign-funded enterprises take on more than 30% of the output of the country. In this circumstances, the thesis researched into the economic effects bring about by FDI in Shanghai as well as in regions around. Addition to econometric computation about FDI and economic development, import and export, the thesis also compare the situation of FDI with those of Jiangsu and Zhejiang province to study the situation of FDI in Shanghai in a more comprehensive way.Hong Kong has always been Shanghai's largest investor. With Closed Economic Partnership Agreement (CEPA) between mainland and Hong Kong put into practiceon January 1, 2004, the economic and investment relationship between two cities of Shanghai and Hong Kong is also a highlight of the research work. Shanghai's economic growth has benefit from FDI and still keeping ahead in attracting foreign investment. The future work emphases of Shanghai's foreign investment offices' is improve the quality of FDI and cooperate with the Yangtze River Delta cities in industrial division, developing modern manufacturing and services, keeping improving the circumstances of foreign investment etc. Besides, Shanghai will keep attracting more regional headquarters and R&D institutions. And by doing so, the construction of building Shanghai into an international centerof economy, trade, finance and ship will be definitely quickened.