Research On The Export Trade Effect And The Technical Overflow Effect Of Foreign Direct Investment To China Textile Industry

Foreign Direct Investment is one of the most important funds of textile industry construction. Since the reforming and open-up policy of the China Government in 1979, textile industry has come through four periods in absorbing Foreign Capital: the beginning period, the continual development period, the expeditious increase period, the adjustment and advancement period. The effect of Foreign Capital to China textile industry changed along with the domestic and overseas environment. The most remarkable change occurs after the quota that restricted the exportation of China textile and clothes cancelled in 2005. In any cases, Foreign Capital has both positive and negative effect to China textile industry. Therefore, we should analyze and conclude the whole effect of Foreign Direct Investment to China textile industry, objectively evaluate the effect of Foreign Capital to China textile industry, find the noticeable problems. All these will be benefit to future China textile industry through theory view and practice view.This paper select the data before and after China's enter into WTO, adopt both theoretic and statistic methods, mainly research the export trade effect and technical overflow effect of Foreign Capital to China textile industry. The research above bases on the theory of Foreign DirectInvestment, starts with the critique of the theory of Foreign Direct Investment, analyze the key questions from several points of view through plenty of time serial data with comparative analytical method, economical index analytical method and econometrical analytical method.The research on the export trade effect of Foreign Capital to China textile industry tells us: On one hand, it has positive effect. It can improve the export structure, drive China textile export trade and boost China textile economy development. On the other hand, it also has negative effect .It bring the imbalance between eastern area and western area, pollute environment and destroy the sustainable development of China textile industry.The research on the technical overflow effect of Foreign Capital to China textile industry tells us: The output of textile industry is not relative to the amount of Foreign Capital. Foreign Direct Investment do not has obvious technical overflow positive effect to China's textile industry. The factors impact on the technical overflow are the restrictions of technique exportation from overseas governments, the stock right and interest limitation to Foreign Direct Investment enterprise from China government, the technical control of foreign enterprise and the weak study capability of China enterprise.At the end of the paper are conclusion and suggestion through the research.