FDI Impact On Economy In China Mainland

In the first place,this paper introduces the basic theories and developing tendency of foreign direct investment(FDI), and conditions of China attracting FDI of China investing foreign countries. Then, it analyzes FDI impact on economic growth, internal investment, technology advancement and balance of payments in the China mainland as host country and FDI impact on industry structure, technology advancement, trade towards foreign countries and balance of payments in the China mainland as investor country by means of demonstrative analytical methods of economics, data cases etc. Finally, through above analysis of advantages and disadvantages, some advice on China introducing FDI in the new times are given in order to offer administrations concerned references. Through the above analysis,the major conclusions that this paper reach is that FDI accelerates economic growth in the China as a whole;FDI has crowding in effect on internal investment;FDI drives technology advancement in the China as a whole,but there are many problems, especially the abilities for assimilation, absorption and innovation of technology are still not strong;FDI have positive effect and negative effect on balance of payments,and the performance of its negative effect obviously is that the amount of profit remitting in the current account is larger and larger. In the meantime, with China introducing more and more FDI, China should properly invest foreign countries. Investing foreign countries have an obvious positive effect on industry structure, technology advancement and trade towards foreign countries and little negative effect on balance of payments in the China. On the whole, investing foreign countries can strengthen Chinese international competitiveness. The protruding place of this paper lies in that the conclusions have persuasion because they build on the basis of positive analysis of economics, data etc. In the meantime, the paper combines the recent developing tendency of FDI and the present development situation of Chinese economy and employs the latest data and materials to state. In this place, it emphasizes the importance of investing foreign countries.