Utilization Of Foreign Investment And The Adjustment Of Industrial Structure Of The Underdeveloped Regions In Shandong Province

Industrial structure is a kind of economic structure on the national economic performance level, which can be expressed as the logical relation among various industries and within the inside of the industries. It is an important reflection of the level and quality of a country's national economic development. There are many differences in the economic development speed and size, economic competitiveness strength and the national income level, etc. The ultimate reason lies in the difference of the industrial structure. Industrial structure is the crystallation of the industrial investment structure, whose formation and adjustment are determined by the investment structure. The input-output ratio of each industrial sectorsare closely related to the level of capital investment. Industrial structure can indirectly reflect the state of the investment structure; Insteadly, certain investment structure plays a decisive role in the adjustment of industrial structure.Utilization of foreign direct investment has been an important economic development strategy in China. In the current trend of international economic integration and Group, the competitive edge due to the industrial upgrading has become the most important driving force in the sustainable economic development. Therefore, the future utilization of foreign investment should focus on helping correct industrial errors and the promotion of industrial upgrading. Practice shows that, in an open economy, the introduction and utilization of foreign investment is an important force affecting a country's optimization of its internal industrial structure. The injection of foreign capital, technology and advanced management mode effects, has directly or indirectly contributed to the adjustment of the industrial structure in China.Taking. Shandong underdeveloped regions (mainly focus on the Shandong's western regions ) as the research subject and through current theories concerning about international direct investment, developing stage, industrial structure as well as regional economics, the paper discusses the effect of foreign investment on industrial structure of the underdeveloped regions in Shandong's western areas, and puts up with some suggestions which are suitable to the district's conditions. Using the method of qualitative analysis, this paper describes and proves the state of FDI and industrial structure in the underdeveloped regions of Shandong Province. Meanwhile, the paper also analyses the driving effect of FDI in the underdeveloped regions to the optimization of industrial structure using the method of quantitative analysis. The research develops into the optimization effect mechanism model to promote the industrial structure in underdeveloped regions and the virtuous three-cycle model of binging in technology through foreign investment and upgrading the industrial structure. Finally, the paper gives feasible suggestions on the optimization of industrial structure through foreign investment in the underdeveloped regions of Shandong Province.The main points are as follows: 1. FDI rationalizes the industrial structure of the underdeveloped areas. The whole introduction of the integrated element as FDI can upgrade the industrial structure. Meanwhile, FDI directly brings in overseas advanced technology and capability of R&D; 2. The guidance and supervision of FDI by the government can promote rationalization of the industrial structure; 3.The competition in the market under the FDI makes industrial structure more efficient. This paper's findings is that: FDI in the underdeveloped regions of Shandong province have more effect on the second industry than the tertiary industry, more effect on the tertiary industry than the first industry, which shows that foreign direct investment contributes most to the second industry, followed by the tertiary industry ,and least to the first industry. Main strategies are to adopt appropriate FDI policy, choose to accept other countries's transfer of industries, and protect the strategic industries with potential comparative advantages within the region. Integrated optimization model is not only to achieve reality comparative advantages by FDI in the underdeveloped areas, but also to help less developed regions find their potential comparative advantages in order to achieve optimization of industrial structure in the less developed regions. Therefore, the integrated optimization model should be adopted, which attaches importance on both conscious optimization and natural optimization.