The Regional Differentia Analysis Of Foreign Direct Investment And It's Effect Estimate On The Industry Structure Transformation In China

After opening up to the outside in 1979, we have attracted the most foreign enterprises to invest in China and great achievements have been obtained in utilizing foreign capitals so far especially after south talking from Deng- Xiaoping, pre-chairman of China. In 2004, foreign direct investment (FDI) utilized reached up to 60.63 billion dollars which broke through 60 billion dollarsat the first time and demonstrated the powerful trend in utilizing foreign capitals. It has been known that the growth of economy is rapid continuously due to FDI. Nevertheless, the relationship between the growth of economy and FDI is necessary to be cleared out. Also, a doubt is that whether FDI will have influences on industrial structures. It is another tough problem that regional disparity is obvious though the quantity of FDI is enormous.By a serial of data from FDI in recent years, this paper analyses empirically the relationship between the growth of economy and FDI and effect on industrial structures owing to FDI and the disparity of FDI among regions or internal. Based on above, it also discusses some problems when utilizing foreign capitals such as positive effect and negative effect. Therefore, research provides benefit for utilizing foreign capitals reasonably in future.Firstly, using data of GDP and FDI utilized really over the period of 1991-2004 and method of econometrics analysis, it shows that the relationship between actual GDP and FDI is steady constantly and economy growth steps forward resulting in FDI. On the other hand, economy growth is not main reason which leads to foreign investment. It means that they haven't cause-effect relationship in double-direction.Secondly, it analyses regional disparity using Theil coefficient. It refers to east, midland, west of China and three-large economy cycles–Delta of Yangtze River of east, Delta of Shooing and Jing-Jin-Ji districts. The conclusion is that regional disparity is obvious. It has a downward trend about internal differences in east and west of China. So is the whole country. Among these, the district which has the largest internal differences is the east of China, the west following and then midland. Moreover, in three-large economy cycles, the differences from regional innards are higher than those among of them.The paper constructs the second industry investment index (SIII) to measure...