A Study On The Impression Of Financial Development And The FDI Technical Spillover Effect To China's Industrial Structure

Since reform and opening-up, China's economy had experienced a long period of economy growth, however, since the new century comes, the extensive style of economic growth mode which we had insisted for a long time cannot suited to the need of our country's economic growth. Our country's economy is facing a series of problem such as resource shortage, environment pollution, and employment difficulties and so on. There is an urgently need to change the mode of our country's economy development. In later "FDI" era, China's purpose of introduce FDI was to use the advanced foreign technology which was carried by FDI capital. So it is vital to study finance development, FDI's influence on our country's economy development's quality.This paper mainly contains: the relevant literature review, after a brief review of relevant literature, we can have a general idea of the research in this area; the experience observation of corresponding variables, the experience observation's purpose is to provide empirical basis for the next study; a theoretical study of financial development, this part is to analyze financial development and FDI's impress on China's industrial structure; the empirical part of this paper, in this part, the empirical model is set up, and then the empirical analysis has been done by using China's annual macro panel data. The last part is the conclusions and policy suggestions of this paper.The theoretical and empirical results show that both financial development and FDI had a positive effect on our country's industrial structure. But the big technical gap between our resident enterprise and foreign enterprise made it difficult for our country to absorb FDI technical spillover, and our country's low efficient financial market couldn't support our country's absorption ability effectively. The conclusions show that China's FDI introduce policy didn't make ideal policy effect. We suggest that we should introduced the appropriate FDI; cultivate adapted industrial group to strengthen our country's absorption ability of FDI technology spillover effect; implement loosely financial policy with regional differentiation and give local government more freedom on formulating local economic policy to promote the coordinated development of china's economy.