On The Influence Of FDI On China's Regional Institution Changes

China overtook the US as the biggest recipient of foreign direct investment in 2003, attracting $53 billion foreign investment compared with $40 billion of the U.S. economy. The Dual-gap model was frequently employed in the previous researches on FDI's influence on growth especially for developing countries. It is believed that the entry of FDI could fill the gaps of saving and foreign exchange for developing countries. However, since the 1990s, there was no gap of saving or foreign exchange in China. Therefore, the entry of FDI was not for filling the gaps in China, whereas it has promoted the technology innovation and upgraded the industry structure. In short, FDI has exerted significant influence on China's economy and society in many ways such as the "spillover effect". The entry of FDI has enormous and profound influence on China's institutional evolution.The paper was based on the previous researches both on overseas and domestic, and employed the institutional economics, using theoretical approach to illustrate the three phrases of China's regional institution changes with FDI's participation; using regression approach to find the influence of FDI on regional institution changes in China; using case study to research the influence of FDI has played in the institutional evolution in southern Jiangsu. It tries to find the method and pathway of FDI's influence on China's regional institution changes. Analyzing the actualities and problems, the present paper intends to find the solution to the problems concerning the FDI's influence on the institutional changes.The paper is divided into five parts as follows:Chapter 1 is introduction, based on the previous researches, specially the correlation between FDI and institution, to put forward the problems concerning FDI's influence on China's institutional changes.Chapter 2 is theoretical analysis, discussing the three phrases of China's regional institution changes with FDI's participation, which includes supply-dominant model, intermediate-diffusion model and demand-induced model* analyzes the three models' characteristics and the transform mechanism.Chapter 3 is empirical approach on FDI's influence on China's institutional changes in order to discover the actualities and problems facing.Chapter 4 is case study on FDI's participation in the institutional changes of southern Jiangsu. It discovers the role FDI has played in the institutional evolution, and the local government's preference on institutional risk, and makes judgment on the performance of the institutional changes of southern Jiangsu with FDI's participation.Chapter 5 is suggestion-making, based on the problems concerning the institutional changes, and puts forward a series of proposals.