A Study Of The Impacts Of Foreign Direct Investment On China's Employment

The employment question has always been one of the important subjects of the economics research, which is the most important in the three major goals: full employment, low inflation and growing at top speed, in the macro economic policy. However, as the large country in population, China faces the severe employment situation at present. Therefore, how to ease the severe employment situation is a question concerned by China extremely.China is a developing country, which funds of solving the employment problem derive from the investment of the developed countries mostly. It's the foreign direct investment. Generally speaking, foreign direct investment (FDI) has a certain positive role to drive this country's employment under open condition. However, this role will be changed according to circumstances. FDI may create or reduce the employment opportunity directly or indirectly depend on many kinds of factors, such as the way of investment, management strategy, the perfection degree and operational efficiency of labor markets, worker's quality.This article analyzes the effect of FDI on employment in different industries in China, which inspects the synthesis influence comprehensively and accurately, in order to give advises for government to formulate scientific policy to guide foreign investment, to make the foreign direct investment play an important role in easing the pressure on employment and to improve the structure of employment in China. Firstly, this article analyzes the distribution of employment in different sectors qualitatively, the results is that: the manufacturing sector is still the most, other sectors in secondary industry show a downward trend in recent years. The number of employment in primary industry is small. In tertiary industry, employment in foreign-funded enterprises mainly concentrates on transport, storage and post, wholesale and retail, social services, financial services and real estate industries. However, employment in other sectors of tertiary industry is less. Subsequently, in order to get more accurate and objective measure about the effect, we set up a theoretical model to assess the direct effect and the indirect effect of the three industries. Then, we found that in different industries FDI has different overall effect on employment. The result shows that: the FDI promotes the increase of employment opportunity in the secondary industry and tertiary industry, but it suppresses the growth of employment in primary industry.Finally, based on the qualitative and quantitative analysis, this article suggests that in order to promote foreign direct investment to create more employment opportunity in our country, our government should persist in attracting FDI in both labor-intensive industry and technology-intensive industry, at the same time pay more attention to guide the FDI flow to tertiary industry and to improve the quality of workers and so on.