The Effect Of Foreign Direct Investment On China's Industry Competition

Since the reform and opening up, China attracts lots of foreign direct investment with the increasing economic and stable macro economic environment. FDI makes great contribution to China's economic development. This thesis is discussing about the effect of foreign direct investment on China's industry competition based on the progress of native and foreign study. It involves the following parts: the effect on industry scale and structure, export competition, etc. At the same time, the paper also analyzes the effect on industrial productivity by demonstration method.It shows through the data that FDI has the following effect on China's industry competition. It accelerates the industry scale and the development of new technology industry and improves the industry's labor productivity. FDI also increases the total export amount and improves the export structure. The export share of non-material products are increasing leading by the multinationals. With the entering of multinationals, it appears the marketing phenomenon of'strategic following'and'marketing conduction'. At the same time, domestic companies have more ability of offering relative products for the multinationals. The relationship between multinationals and domestic companies is improved. By demonstration analysis, we can conclude that FDI has the active effect on industrial productivity, but because the gap between multinationals and domestic corporations, FDI also has the extrusive effect to domestic Corps.In all, foreign direct investment has active effects on our industry competition, but it has negative effects also such as the occupancy of marketing share and the overflow effort on domestic corporations. We should strengthen its advantage and avoid the weakness so that foreign direct investment can make great contribution to China's industry competition.