The Impact Of FDI On China's Wage Level

As long with the tide of global economic integrations urging forward, the flowing of international capital is rising abruptly up. As the main form of international fund flow, FDI is an increasingly focus of attention of people in all work fields. It has a great impact on the economic development of both the parent country and the host country.FDI influences China's economy development in various ways. This paper focuses on examining what impact the inflow FDI have on the wages in china. Based on previous studies in the field, this paper discusses systematically with both the qualitative and quantitative methodology. Firstly, this paper compares the distribution of FDI in different industries in china with the wage levels of workers in different industries. Then, this paper theoretically analyzes the impact on the differences of workers'wage level and the changes of differences, which confirmed that the inflow of FDI will expand the wage gap between skilled and unskilled workers. Meanwhile the realizing mechanism is also well discussed with both the empirical study and the theoretical analysis, these prove that competition, the flow of talent and knowledge spillover promote the improvement of productivity, which raise the level of the entire wage.While the discussions on the wage impacts will be followed by the empirical evaluation of the average workers'wage level in the presence of FDI from 1999-2007 about eight industry, which prove that FDI have positive effects on the wage level of workers in different industries. Finally, the paper gives the politic suggestions on how to attract and how to raise the wage levels of the unskilled workers.