| On May 1,2004, the number of members of Europe Union (EU) was increased from fifteen to twenty-five by accepting ten new members, such as Cyprus, Czech, Poland, Slovenia etc. This is the fifth and also the largest enlargement in EU history. The new EU with a population of 450 million, foreign trade accounting for twenty percent of world's total and GDP occupying one fourth of the world created a large market with foreign trade scale equivalent to that of America. EU has long been an important source of FDI for China, but the fact shows that EU's investment in China is barely satisfactory; its investment just represents a small proportion of the total foreign capital China has actually utilized.Under the new situation of EU's eastward enlargement, In theory, EU's economic and trade relationship with China including its investment in China will be affected to some extent in short term; In practice, whether EU's eastward enlargement will do produce the diversion effect of its direct investment in China? Whether the ten new member states, which were brought into EU's integration, have the ability to accept the diversion effect? And if the effect do exist, then is its influence strong or weak? How can we do to deal with the situation? Obviously, to study and analyze these subjects in front of us, is undoubtedly positive and realistic, not only for mastery of prospect of EU's direct investment but also for attraction EU to expand investment in China. Therefore, the paper empirically investigated the effect of EU's eastward enlargement on China's attracting FDI from EU based on the theory about the effect of regional integration on direct investment and status quo of EU's investment in China, and thus related countermeasures was presented. The paper consists of four parts:The first part is to review theories related with FDI, and that about the effect of regional integration on direct investment.The second part is to investigate and analyze status quo and... |
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