The Mechanism Of FDI Influencing The Optimization Of Chiness Industry Structure

Under the open economic enviroment, FDI becomes a more importment driving power to influence the regulation of one nation's industrial structure. The utilizing of FDI has always been an important strategy in the process of modernization. Through the input of foreign capital,introduction of advanced technology and application of the managerial model, it promotes our nation's industrial regulation in a direct or indirect way. But it brings many disadvantageous effect at the same time.This paper studies FDI how to influnce the adjustment of industry structure in china and , discusses factors in existence. Then for optimizing industry structure, increasing FDI flux, advancing FDI quality and optimizing area distribution of FDI, it makes a series of suggestions.Firstly, this paper tests the Granger causality relationship between the adjustment of industry structure and FDI for China over the period 1982-2003 applying the cointegration theory. The result shows :there is a long run unidirectional Granger causality relationship from the change of FDI to the adjustment of industry structure in the presence of cointegrarion among the variables, but the change of FDI is not the main reason that promotes the adjustment of Chinese industry structure in the short run.Secondly, this paper analyses factors influencing the adjustment of industry structure and how to influence the optimization of industry structure applying ISM . Then, the paper evalutes the factors one by one and analyzed FDI how to influence the adjustment of industry structuresy stemicly.Lastly, on the optimazation of industry structure, the optimization of FDI distributing, this paper puts forword a series of suggestion which can be seceleted from and implemented to solve the problems.