An Analysis Of China's Industrial Structure Based On FDI

China has achieved great achievement in economy growth in the last twenty years since the opening and reforming of the nation. Meanwhile, the GDP of China has been increased rapidly and steadily and the average income of the citizens has also gained improvement. Along with the progress of the opening and reforming of the nation, the speed-type economy development of China has turned gradually into a efficient-type one. The optimization and upgrading of the economy structure has been attached great importance during this period. However, the change in economy structure is due to the change in investment structure. Therefore, the FDI is the essential factor that influences the adjustment of industrial structure in China, under the condition of comparatively low level of both technology and management. There are four chapters in this thesis. The first chapter contains the introduction of the background, the significance of the topic and the general literature review in this field. The second chapter analyzes the influence of FDI on the industrial structure in China qualitatively. The situation of industrial structure, the present foreign investment and the influence of FDI on the three industries in China are to be analyzed in detail in Chapter Two. Chapter Three analyzes the influence of FDI on the change of the industrial structure in China quantitatively. The influence of FDI on the increment of the industrial structure in China is investigated from the angle of FDI conservation and flow capacity in regression equations. The long-term stability of the regression variables is tested in the framework of cointegration theory. The Granger causality testing is used to test whether or not there is a causality relationship among the regression variables and the further investigation will be made to identify its direction type of the causality if the causality does exist. The strategic orientation of Chinese industry is analyzed against the global background in Chapter Four. In the present international economy environment, we should establish new strategic principles and detailed requirements to improve the industrial policies involving FDI in the adjustment of the Chinese industrial structure, in order that we can advance the optimization and upgrading of the industrial structure in China. This thesis adopts an approach which combines both the qualitative and the quantitative models and makes some innovations on the basis of the existing literature. In the regression analysis of the increase values of the FDI and industrial structure, this thesis adopts the OLS. Taking the stationary problem of the data into consideration, this thesis makes a stationary testing to the data sequences and corrects the potential problems relating to the sequences adopting the Cochrane-Orcutt approach. In order to test the existence of the spurious regression phenomenon, this thesis makes a stationary testing to the regression residual sequences, too. The regression variable is analyzed from the data-creating progress point of view in the framework of the cointegration theory. Since the traditional econometric model identifies the relationship among the model variables only by a certain economy theory or the incomprehensive understanding of some economy behaviors subjectively and randomly, the subjectivity and the randomness can be effectively avoided in this thesis. At last, this thesis makes a Granger Causality Testing to the regression variables so as to identify the existence of the one-way or two-way causality relationship among the variables.